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A  BREED  OF  BARREN  METAL 


OR 


CURRENCY  AND  INTEREST 


A    STUDY    OF    SOCIAL    AND    INDUSTRIAL    PROBLEMS 


BY 


J.  W.  BENNETT 


"First  freedom  and  then  glory;  when  that  fails, 
Wealth,  vice,  corruption,  barbarism  at  last." 


CHICAGO 
CHARLES  H  KERR  &  COMPANY 

175  MoNRoii  Street 


Copyright  1895,  by 
J.  W.  BENNETT 

Bight  of  Translation  Reserved 


Xibrary  of  Progress,  No.  16.  Quarterly,  81.00  a  year.  August,  1895 

Entered  at  the  Postoffice,  Chicago,  as  second  class  matter. 


CONTENTS. 

PAGE 

^   CHAPTER  1 13 

"'^  Introduction  — The  importance  of  studies  in  sociology — Man  a  social  animal — 
>.  The  correct  method — Social  and  economic,  compared  to  physical  science  — 
ac  Natural  law  the  foundation  of  both — All  science  speculative — Happiness  the 
«t  object  of  existence — Happiness  development — Must  be  general — Ideal  state  is 
^  happiness  to  all — In  sociology  as  well  as  art  and  science  the  ideal  is  the  standard 
£"  — The  ideal  is  that  which  corresponds  most  closely  with  natural  law — Natural 
•-•  law  must  be  obeyed — The  tirst  business  of  social  and  economic  science  is  to  find 
underlying  natural  principles — Ethics  the  foundation  of  these  sciences — Present 
practices  and  institutions  to  be  tested  by  ethical  axioms — Unsatisfactory  results 
.'  to  be  explained  by  economics— Knowledge  for  the  use  of  man. 

::    CHAPTER  II 19 

^  Disastrous  Phenomena — Periodic  panic — Distress  of  laborers— Paralysis  of 
"*  business— Borrowing  by  the  government  in  times  of  peace  and  prosperity  — 
These  phenomena  seemingly  occult— Varied  explanations  contradictory  and 
unsatisfactory — Periodic  distress  seemingly  incident  to  our  industrial  organiza- 
tion— The  optimist-conservative— His  absurd  empirical  restrictions  to  the  use 
of  intelligence — The  conservative  a  real  anarchist  as  to  all  but  police  power — 
His  inconsistency — His  dogmatic  stand — The  mass  of  citizens  think  otherwise. 

^  CHAPTER  III ; 24 

^  The  Distribution  OF  Wealth— Distribution  dependent  on  the  elements  enter- 
.  \»  ing  into  the  production  of  wealth— What  these  elements  are- Land,  the  Laborer 
^<J  and  Capital— Problem,  to  ascertain  what  portion  of  product  goes  to  Landlord, 
^i       Laborer  and  Capitalist— The  term  "Laborer"  defined— Wages  defined. 

CHAPTER  IV 28 

The  Laborer— Is  he  overpaid?— What  he  receives— What  it  costs  to  live— Com- 
mon experience  rather  than  made  conditions— The  census  figures  — Bread  and 
soup  economists— The  pay  of  clerks— The  remuneration  of  laborers — Farmers 
—The  remuneration  of  sweaters  and  shop  girls — The  social  evil  and  its  rela- 
tion to  wages— A  reform  work  for  women — The  army  of  unemployed— The  con- 
clusion that  the  remuneration  of  the  laborer  is  not  too  great — If  he  is  entitled 
to  more,  he  needs  it — The  only  means  by  which  higher  wages  may  be  paid. 

CHAPTER  V 33 

The  Margin  OF  Profits— Some  figures  on  the  actual  shares  of  the  products  of 
industry  received  by  the  several  classes — Mr.  Atkinson's  cotton  mill — The 
share  of  the  laborer — The  remainder  goes  to  keep  up  wealth  and  remunerate 
the  capitalist  and  landlord— Ten  to  fifteen  per  cent  upon  capital  employed, 
theprobable  margin  of  profits — This  includes  interest  and  rent — It  applies  to 
successful  enterprises  only-  -Census  figures— Their  indefiniteness— The  margin 
small — To  whom  shall  it  go?  the  vital  question. 

5 


:^Hf^'^o7 


C  CONTENTS 

PAGE 
CHAPTER  VI 35 

The  Landlord— His  right  to  remuneration — Land  defined — Ricardo's  definition 
-The  signiticance  in  which  it  is  here  used — Mines  not  land  in  the  same  sense 
as  farniinK  land  or  building  sites— Forests  not  land,  unless  cultivated— The 
natural  basis  of  property— What  one  produces  is  primarily  his  own— What  he 
does  not  produce  or  what  another  produces  is  not  primarily  his  own — Land 
not  produced  by  individuals— Does  not  belong  to  individuals— Belongs  to  the 
community  in  usufruct  only -Community  can  give  no  greater  title  than  it 
possesses— The  collection  of  rent  does  not  aid  productivity— No  return  given 
by  landlords  for  rent  taken— An  imposition— Royalties  in  the  same  category- 
Landlords  and  royalty-takers  levy  a  billion  of  dollars  or  more  per  year  on  in- 
dustry—They  take  that  much  of  the  annual  product— It  does  not  justly  belong 
t  o  them,  must  therefore  belong  to  Hborer  or  capitalist  or  both. 

CHAPTER  VII 39 

Xerms— The  necessity  for  an  exact  use  of  words— Wealth,  capitalist  and  laborer 
defined— Interest  and  capital— Profits— No  necessity  for  distinguishing  between 
them  in  this  inquiry— Arguments  based  on  an  ambiguous  use  of  terms— Capital 
held  to  be  labor— The  use  of  terms  in  their  ordinary  signification  not  so  neces- 
sary as  their  use  in  the  same  signification  in  the  same  discourse— Is  capital 
stored  labor?— The  fallacies  based  on  this  erroneous  conclusion— A  jugglery  of 
terms— Neither  capital  nor  labor  has  rights— Rights  belong  to  persons,  not 
things— The  basis  of  the  capitalist's  claim  for  remuneration— The  basis  of  the 
laborer's  claim. 

CHAPTER  VIII ....> 44 

Is  Wealth  Essentially  Productive— The  observed  essential  principle  of 
decay  in  all  wealth— Specific  instances— The  pyramids— Rome— A  dynasty  of 
kings— Articles  of  common  use— The  life  of  a  machine— Without  the  exertion 
of  the  laborer  the  country  would  turn  into  a  wilderness — What  we  eat  and  drink 
and  wear— We  live  from  hand  to  mouth— The  independence  of  the  capitalist- 
Labor  alone  the  preserver  of  wealth— No  exception  to  the  rule  of  decay  in 
wealth— Interest-taking  must  be  founded  on  the  assumption  of  the  spontaneous 
growth  of  wealth— The  absurdity  of  the  assumption. 

CHAPTER  IX = 51 

The  Productive  Power  of  Wealth— Instances  and  objections— Is  capital 
productive?— How  it  differs  from  wealth— The  productive  power  of  a  machine 
— Interest  not  a  charge  for  a  machine's  effectiveness — Interest  a  charge  for  use 
of  wealth— Is  the  borrower  alone  benefited  by  that  use?— Men  should  be  paid 
for  what  they  relinquish,  not  for  what  they  can  extort— A  scientific  test  of  the 
productive  power  of  wealth— How  we  determine  the  cause  of  steam— The  ver- 
dict against  the  productivity  of  wealth— Wealth  an  advantage  to  the  laborer, 
but  that  is  not  the  question— The  toiler  is  heir  to  all  the  ages,  has  a  right  to  the 
use  of  ideas  of  inventors  applied  through  wealth— Unfinished  product— Other 
instances  of  decay  not  growth  in    wealth — The    house — The  mill — ^The  horses, 

CHAPTER  X 6o 

Objections  and  Instances  Continued— The  argument  of  Bastiat— Its  import- 
ance—Founded  on  the  assumption  of  spontaneous  productivity  of  wealth- 
Reciprocal  services— The  mistakes  of  Bastiat— Money  not  wealth— Bastiat's 
illustrations— The  house  and  ship— The  crowns  and  sixpences— Mondor's 
house— Peculiar  conditions— Malthurin  and  the  sack  of  corn— The  same  old 
fallacy— Malthurin  and  the  man  with  eggs— James  and  the  plane— The  interest- 
taker's  demands— What  he  gives  up— The  power  of  wealth  and  the  laborer  con- 
trasted -In  the  light  of  man's  origin— Thora's  question  as  to  crowns  and 
Bastiat's  answer  -Spontaneous  growth  again— The  advantage  of  the  interest- 
taker  as  told  by  Bastiat— The  conclusion  drawn  therefrom— Indefinite  and 
fixed  remnneration—Hoarding—Our  addresses  to  laborer  and  capitalist — In- 
terest generally  applied— Things  making  themselves— Modern  necromancy. 


CONTENTS  i 

PAOE 
CHAPTER  XI 75 

Objections  Continued— Without  interest,  it  is  said,  there  would  be  no  motive 
forsaving— The  falsity  of  this  proposition  pointed  out— A  sufficient  motive- 
Will  the  capitalist  lend  without  interest?— The  reason  why  he  will,  if  he  cannot 
get  it— The  effect  upon  the  producer  of  the  discontinuance  of  interest-taking— 
The  only  remedy  for  low  wages. 

CHAPTER  XII 80 

Interest-taking  Wrong— A  scientific  test— Phenomena  explained— Industrial 
panics— The  rapid  accumulation  of  wealth  in  the  hands  of  the  few— Poverty  of 
toilers,  etc.,  etc. 

CHAPTER  XIII 82 

Financial  Panics— The  explanation  of  their  causes— Rent  and  interest  charges 
too  large  to  be  met— What  they  are— What  we  have  to  meet  them— Country 
compared  to  a  great  business  concern— The  difference— Estimates   and   figures 

Interest    concluded    to  be   the  cause   of  financial   distress— Another  way  of 

reaching  the  same  conclusion— Objections— Necessary  charges  of  production  — 
What  is  saved  by  wage-earners— A  summing  up. 

CHAPTER  XIV 97 

The  Social  Extremes — Why  wealth  accumulates  so  rapidly  in  the  hands  of  a 
few— Is  it  for  services  rendered  by  the  rich?— What  they  do  to  serve  the  produc- 
ing masses— The  method  of  accumulating  a  fortune — Explanation  of  the  in- 
crease of  wealth — The  same  in  detail— Industrial  and  financial  groups— What 
figures  show— How  wealth  is  transferred— The  rapidity  of  the  process- 
Checks. 

CHAPTER  XV 104 

Extreme  Poverty— What  the  interest-taker  demands— What  he  receives — Its 
etfect  on  the  toiler — The  yearly  product  limited— No  way  of  increasing  the 
share  of  the  laborer  without  diminishing  the  share  of  some  one  else — How 
limited  in  quantity  the  product  is — Make  producers  of  non-producers. 

CHAPTER  XVI 108 

Imfroved  MACHiNERV-Its  failure  to  ameliorate  the  condition  of  the  laborer- 
Wages  now  and  in  1450— The  increased  producing  power  of  the  laborer— Why 
does  he  not  get  the  benefit  of  this  power?^Interest-taking  is  to  blame— The  de- 
mands of  interest  increase  geometrically,  producing  power  does  not— Capital- 
ists take  all  increase— The  inventor  not  rewarded— Men  are  thrown  out  of 
employment,  and  competition  keeps  wages  down  so  that  the  capitalist  can  take 
all  increase. 

CHAPTER  XVII Ill 

The  Large  Salaries  of  Non-Pkoducers — How  accounted  for — The  limit  of 
tangible  production  -The  wages  of  superintendents— Measure  of  remuner- 
ation—The principle  that  one  has  a  right  10  all  that  he  can  get — The  measure  of 
remuneration  thereunder  -Brain  work— The  standpoint  of  the  discussion — 
The  great  inoncy-getter--Remuneration  for  mental  and  physical  exertion — 
The  lawyer  -The  doctor  -The  literary  man — Works  of  art — The  inventor — The 
range  of  talent— Ability— What  is  the  source  of  large  incomes— Are  the  people 
interested  in  the  size  of  salaries  of  private  coporation  officials? — Wealth  and 
its  responsibilities. 

CHAPTER  XVIII 123 

Work  A  Boon— Involuntary  idleness— Extraordinary  expenses  incurred  in  times 
ol  financial  distress— Why  they  seem  to  help  the  condition  of  the  country. 


8  CONTENTS 

PAGE 

CHAPTER  XIX 125 

War  and  Prosperity — Their  connection  explained — Historical  testimony — The 
war  spirit  and  slavery— Revolution. 

CHAPTER  XX 127 

Wealth  and  National  Stability— Why  great  wealth  has  proved  destructive  to 
great  nations— The  basis  of  national  integrity — Wealth  and  the  means  of  get- 
ting it. 

CHAPTER  XXI 129 

The  Yeomen  of  America — The  passing  of  the  independent  farmer — The  change 
in  the  character  of  the  agricultural  class— Causes — A  peasantry  being 
formed— Danger  to  institutions — How  it  may  be  avoided. 

CHAPTER  XXII 133 

Mortgage  Indebtedness — Its  rapid  increase— Is  it  an  evidence  of  prosperity? — 
Arguments  to  that  effect  analyzed — Debts  and  assets — Increase  in  wealth  as  a 
whole  not  necessarily  a  sign  of  national  prosperity — A  specimen  of  plutocratic 
reasoning— Figures  as  to  the  relation  of  farm-mortgage  debt  to  prosperity — 
Value  of  product,  not  of  capital,  the  measure  of  debt-paying  power — Census 
figures  analyzed— The  conclusion— Mortgage  debts  in  general— General  con- 
clusions. 

CHAPTER  XXIII 140 

Historical  Testimony — The  wrong  of  interest-taking  always  recognized  by 
thinkers — The  Mosaic  law— Objections — The  Greeks — The  Romans — The 
mediaeval  Church— The  early  Church— Europe  of  the  Middle  Ages— Reformers 
and  usury — Shakespeare's  idea — The  Jews  and  the  movements  against  them  — 
Legislation — Penal  statutes — Prohibitive  statutes — The  statute  of  Queen  Anne — 
France — General  conclusions— Objections— The  factof  a  thing  having  existed 
no  proof  of  its  righteousness. 

CHAPTER  XXIV 149 

Accumulated  Wealth— It  may  be  used  as  a  means  of  exacting  interest — The 
necessity  of  borrowing — Millions  born  into  the  world  without  wealth  -Tools  and 
machinery  scarcely  less  necessary  than  land — The  necessity  of  borrowing  in 
the  commercial  world  —  Interest-takers  control  the  currency — Glut  and  over- 
production— Supply  and  demand — Illustrations. 

CHAPTER  XXV i55 

Our  Currency  System- The  effect  of  hoarding  continued- -How  it  cripples  in- 
dustry— An  illustration — Results— Interest  divided— Symptoms  and  causes— 
The  adaptability  of  our  present  currency  to  the  ends  of  the  usurer — Value  and 
volume — Metallic  currency  inadequate  in  volume  to  the  country's  needs- 
Figures- Volume  of  circulation  here  and  in  Europe— GoHd  product  all  neces- 
sary to  supply  the  arts — Fluctuation  in  value  and  volume  -Has  the  price  of 
gold  appreciated? — Silver — The  single  silver  standard — No  commodity  can  be 
made  a  non-fluctuating  money  standard— Value  and  supply  and  demand— Our 
currency  well  adapted  for  fluctuation — Redeemable  currency — Demonetization 
of  silver— Bimetallism— A  will-o'-the-wisp— Gresham's  law— Composite  stand- 
ard— Evils  of  fluctuation. 

CHAPTER  XXVI ,.    .,.,,   168 

Our  Banking  System — The  bank  as  an  instrument  for  controlling  currency — 
Money  a  close  monopoly — Its  effect — The  importance  of  governmental  con- 
trol of  the  currency — Fraud  or  cunning,  and  force — The  effectiveness  of  the 
bank — The  weaknesses  of  the  banking  system — Its  effect  on  the  community — 
Action  of  banks  in  time  of  panic — Their  withdrawal  of  money  from  trade — A 
sound  curn  ncy  system — The  present  banking  system  from  the  standpoint  of 
financiers — No  solution  for  the  currency  question  while  the  banking  system 
is  controlled  by  private  individuals — Banking  ihe  peculiar  province  of  govern- 
ment. 


CONTENTS  V 

PAGE 

CHAPTER  XXVII.. 172 

A  Real  National  Banking  System — How  it  may  be  established — A  detailed 
plan — The  essential  principles — Its  effect  on  usury — Further  provisions  against 
interest-taking— A  complete  remedy. 

CHAPTER  XXVIII 177 

The  System — Its  practical  working— Regulation  of  the  money  volume — Supply 
and  demand — A  convertible  currency  ideal — Gold  and  silver — A  paper  cur- 
rency— Coin  certificates — The  money  unit^What  fixes  its  value— Volume  and 
the  unit — Price  of  the  metal  and  the  money  unit — Gold  a  constantly  appreciat- 
ing money  unit — A  mixed  currency — The  value  of  the  commodity  money  unii 
depends  on  the  market  price  of  the  material  of  which  thS  money  is  composed- 
Auxiliary  currency — Silver — Intrinsic  value  not  necessarily  an  attribute  of 
money — The  proposed  money  a  paper  money — The  weakness  and  strength  of 
paper  currency — Historical  instances — Paper  money  always  resorted  to  in  des- 
perate national  crises— Metallic  money  always  fails  in  time  of  national  need — 
The  bankers' proposition— The  proposed  currency  and  supply  and  demand- 
Incapable  of  fluctuation. 

CHAPTER  XXIX 191 

The  System  Continued — The  money  standard  of  the  proposed  system — Gold 
as  a  standard — Its  fatal  defects— Contracts  made  for  payment  in  gold — Gold 
not  a  standard,  but  a  value  denominator— A  fluctuating  standard  radically 
faulty — The  real  standard — Objections  noticed— A  fixed  quantity  of  human  ef- 
fort the  real  standard — How  to  arrive  at  such  a  standard — Buying  and  selling— 
But  two  factors  in  production. 

CHAPTER  XXX , . , 197 

Objections  Answered — Impracticability — Deception  in  weight  and  measure — 
Pricesof  goods — Security  a  deterrent  to  trade — A  refusal  to  sell  goods  after 
money  had  been  issued  thereon — Would  increase  the  army  of  office-holders- 
Political  corruption — A  remedy  for  that — The  development  of  the  principle 
of  local  self-government — Distrust  of  the  people  and  its  result— The  basis  of 
the  spoils  system — The  appointive  power — An  irresponsible  judiciary — Election 
by  select  bodies — The  Electoral  College — Money  in  politics — Warehouse 
receipts— Security  — Bonds  and  stocks — Goods  in  transit — Revenue — Silver 
and  gold. 

CHAPTER  XXXI 212 

Objections  Answered — Why  it  is  necessary  to  have  a  special  form  of  currency 
for  the  purpose  of  preventing  interest-taking — Prohibitive  statutes — Reasons 
why  they  are  so  often  ineffective— The  proposed  regulation  not  a  prohibitive 
statute  in  the  sense  that  other  usury  laws  are — Prohibitive  statutes  not  always 
ineffective^The  testimony  of  Bentham — The  statute  of  Queen  Anne — Testi- 
mony as  to  effectiveness — The  sort  of  a  usury  law  which  would  not  be  ineffec- 
tive— Specific  provisions — Has  the  state  a  right  to  regulate  contracts  between 
citizens? —It  is  done  every  day — Bentham— Hoarding  money — How  it  may  be 
prevented — Specific  provisions — Adam  Smith — All  interestwrong — The  borrow- 
er's profit— Will  interest-taking  cease  of  itself?— Is  interest  falling? — Is  risk 
the  basis  of  excessive  inte^'est?— Observed  facts. 

CHAPTER  XXXII 224 

Interest-Taking  and  Wage-Earners— The  conclusion— But  one  way  of  in- 
creasing wages — Must  strike  at  unearned  incomes — These  must  be  reached 
through  interest-taking — Capital  profits  unearned— Something  for  nothing — 
The  laborer  and  Malthus. 

CHAPTER  XXXIII 227 

A  Feasible  Currency  System  -Some  of  its  advantages -A  destroyer  of  usury  - 
Vested  interests  Our  reform  friends  — The  single-tax  Its  theory  and  pr.ictice 
— The  dilemma  of  the  assessor  Exchange  value  of  land —Land  reform  not  a 
panacea — The  single-tax  theory  from  a  philosophical  standpoint-  Land  and 
minerals — The  postal  savings  bank. 


lO  •    CONTENTS 

PAGE 

CHAPTER  XXXIV 239 

Results— The  destruction  of  interest-taking — What  would  follow— Division  of 
wealth — Not  fanciful — The  advantage  of  the  possessor  of  surplus  wealth  — Its 
results — The  problem  we  must  solve — Important  natural  truths — Applied — The 
rank  and  file  of  toilers — They  must  work  out  their  own  salvation— The  mistake 
of  reformers — Tariff-reform — The  same  mistake  with  currency  reform  must  be 
avoided — Insist  on  principles,  not  on  details — Objectors — Their  disinterested- 
ness— Some  interesting  questions — The  millionaire — The  woman  of  fashion--- 
The  Solon— Financiers— The  opposition— Interest-taking  before  the  tribunal  of 
Intelligence. 

CHAPTER  XXXV 250 

A  Vision— A  promised  Ifind— The  armies  of  toil--The  attendant  specter— Two 
goals— The  giants  of  the  furnace— The  pale-faced,  cunning  man — The  specter 
of  want  and  the  specter  of  sham— Why?— The  solution— "Toil  or  perish"— The 
crisis— A  transformation— The  end. 


PREFACE. 

I  GIVE  this  buok  to  the  public  in  the  hope  that  it  may 
aid  in  bringing  about  a  re-examination,  in  the  light  of 
modern  intelligence,  of  one  of  the  principles  lying  at 
the  foundation  of  our  industrial  and  social  organiza- 
tion. If  the  effort  shall  have  any  influence  in  bringing 
about  such  a  consummation,  its  mission  will  be  accom- 
plished; The  foundation  must  be  secure  if  the  fabric 
is  to  stand,  and  I  believe  that  finance  and  industry  now 
rn.st  on  an  insecure  foundation.  The  line  of  argument 
pursued  in  this  work  has  n^ver,  to  my  knowledge,  been 
presented  by  any  other  person.  The  reason  of  the  wrong 
has  never  before  been  fully  explained.  If  I  am  mis- 
taken, he  who  points  out  the  error  will  confer  a  favor 
on  me  and  thousands  of  other  seekers  after  truth.  But 
we  want  rnason  and  not  dogma. 

The  practical  application  of  the  truth  here  presented 
would  be  so  far-reaching  in  its  effect  as  to  be  revolu- 
tionary. But  it  would  be  a  peaceful  and  beneficent 
revolution,  doing  wrong  to  no  one,  and  bringing  justice 
to  oppressed  millions. 

In  the  work  hen-  presented  I  have  endeavored  to  call 
tilings  liy  thf'ir  right  names.  No  social  wrongs  are  im- 
personal, and  in  denouncing  or  merely  pointing  out  a 
wrong  those  who  gain  by  such  wrong  must  expect  to 
receive  some  of  the  censure.  I  criticise  classes  for  what 
they  do,  not  for  what  they  are.  If  the  average  day 
hiborer  who  tries  to  keep  body  and  soul  together  on  a 
dollar  per  day  slionld  change  places  with  the  nian  who 

11 


12  PREFACE 

makes  a  million  a  year,  that  laborer  would  be  just  as 
grasping  and  unscrupulous  in  money-getting  as  he.  The 
wealthy  are  not  villains,  nor  the  poor  oppressed  saints. 
But  that  is  no  reason  why  the  wrong  practiced  by  one 
class  upon  the  other  should  not  be  condemned.  We  are 
all  as  good  as  we  know  how  to  be.  I  do  not  believe  that 
any  being  is  perversely  or  malignantly  bad.  The  trouble 
is,  we  are  too  ignorant  to  recognize  the  right  and  do 
it.  I  think  that  the  words  of  the  "Melancholy  Dane" 
should  be  changed  into  "blundering  fools  all."  Igno- 
rance is  the  root  of  all  evil;  perfect  knowledge  is  per- 
fect morality. 

Then  it  is  necessary  to  look  all  questions  square  in  the 
face  and  try  to  learn  the  truth  about  them.  I  hope 
that  I  have  done  this;  it  is  what  I  have  attempted. 

The  key  to  the  interest  question,  the  topic  which  I 
discuss,  is  the  currency  of  the  nation.  For  that  reason 
I  have  added  a  discussion  of  the  currency  question  and 
set  out  a  plan  for  a  scientific  currency.  *  It  is  practical 
and  suited  to  the  times.  To  all  liberal-minded  per- 
sons, it  is  worthy  of  most  careful  consideration.  The 
idea  of  using  wealth  in  the  process  of  exchange  as  the 
basis  of  a  currency  system  is  old.  Holland  did  it  suc- 
cessfully. The  means  of  applying  that  principle  are 
my  own.  I  offer  the  work  to  an  earnest,  truth-seeking 
public,  in  the  hope  that  it  will  further  the  cause  of  jus- 
tice and  truth.   Examine  it.     It  will  repay  the  trouble. 

J.  W.  B. 


A  BREED  OF  BARREN    METAL 

CHAPTER  I. 

Introduction. — The  importance  of  studies  in  sociology — Man  a  social  animal — 
The  correct  method — Social  and  economic,  compared  to  physical  science — 
Natural  law  the  foundation  of  both — All  science  speculative — Happiness  the 
object  of  existence — Happiness  development — Must  be  general — Ideal  stale  is 
happiness  to  all — In  sociology  as  well  as  art  and  science  the  ideal  is  the  standard 
— The  ideal  is  that  which  corresponds  most  closely  with  natural  law — Natural 
law  must  be  obeyed — The  first  business  of  social  and  economic  science  is  to  hnd 
underlying  natural  principles — Ethics  the  foundation  of  these  sciences — Present 
practices  and  institutions  to  be  tested  by  ethical  axioms — Unsatisfactory  results 
to  be  explained  by  economics — Knowledge  for  the  use  of  man. 

The  most  important  chapter  in  the  hook  of  nature  is  man. 

There  must  be  an  excuse  for  all  things.  My  friend 
the  artist  tells  me  why  he  painted  this  picture  and  not 
that.  My  scientific  acquaintance  has  the  best  of  rea- 
sons for  following  his  particular  line  of  investigation. 
My  clerical  friend  can  give  a  reason  for  every  sermon, 
and  I  feel  that  I  must  give  a  reason  for  this  book.  I 
find  it  in  the  condition  of  fellow  men  about  me.  The 
lot  of  the  average  human  seems  a  strangely  unhappj- 
one.  Why?  is  an  interesting  and  important  study. 
This  volume  is  intended  to  wrestle  with  that  problem, 
frcjm  the  material  standpoint.  It  will  try  to  discover 
the  why  of  man's  material  discomfort.  If  that  is  dis- 
covered, the  discovery  will  douI)tless  lead  to  a  clearer 
understanding  of  the  psychological  questions  wliich  con- 
front us.  From  the  tangit}le  we  will  try  to  arrive  at 
the  intangible  and  to  throw  light  on  some  of  the  all 
important  questions  which  harass  social  man.  It  is 
becau.sH  these  problems  are  unsolved,  that  this  book  is 
undertaken,  for  I  still  believe, 

"The  proper  study  of  niaiikiml  i.s  man." 

The  epigram  is  as  true  to-day  as   when    wrilt<n    by 

IS 


14  A  BREED  OF  BARREN  METAL 

Pope  or  practiced  by  Byron  or  Shakespeare.  The  field 
is  unlimitedjthe  possibilities  unbounded.  The  relations 
of  man  to  man  are  less  understood  than  any  other 
branch  of  knowledge.  A  correct  knowledge  of  what 
these  should  be  is  the  ultimate  end  of  all  mental  effort. 
The  humblest  worker  in  the  field  is  engaged  in  the 
grandest  of  occupations. 

Man  is  essentially  a  social  animal.  All  that  he  has, 
all  that  he  is,  comes  from  association  with  his  fellow 
men.  The  most  profitable  study  of  man,  then,  is  in  his 
social  relations.  As  we  learn  the  physical  laws  of  the 
universe  by  studying  the  relations  of  things,  so  we  may 
learn  the  social  laws  of  mankind  by  studying  the  rela- 
tions of  man  to  man.  If  we  would  profit  by  the  study 
of  the  physical  universe,  we  must  learn  its  correct  laws, 
the  great  principles  on  which  are  builded  the  harmonies 
of  nature.  It  is  the  study  and  determination  of  these 
that  has  enabled  man  to  harness  steam,  to  chain  light- 
ning to  his  triumphal  car,  and  count  and  measure  and 
weigh  untold  worlds.  It  is  by  putting  himself  in  har- 
mony with  nature's  laws  that  man  has  made  all  mate- 
rial advances.  Just  in  the  same  way  we  must  learn  and 
put  in  practice,  the  great  natural  laws  of  harmony  be- 
tween man  and  man.  If  we  would  make  social  and 
moral  advances,  we  must  put  ourselves  in  harmony 
with  the  eternal  laws  of  justice  on  which  all  stable  so- 
cial and  political  institutions  must  be  founded. 

Sociology  and  political  science  have  more  to  do  than 
to  catalogue  the  facts  of  the  rise  and  fall  of  prices  un- 
der this  or  that  condition,  or  to  measure  the  influence 
of  competition  on  this  or  that  branch  of  business. 
There  are  great  laws  to  be  discovered  in  the  social  as 
in  the  physical  world.  We  have  still  to  formulate 
the  gravitation  and  conservation  laws  of  sociology,  the 
foundation  principles  of  social  relations.  Fortunately 
for  us,  Galileo,  Kepler,  Newton,  Laplace  and  the  thou- 
sands who  have  lived  before  and  after  them,  thought 
that  discovery  was  a  part  of  the  provincfe  of  science. 
They  did  not  content  themselves  with  motiveless  class- 
ifying of  cold  unrelated  facts.  Neither  should  the  dev- 
otees  of   social   science.     They   should   try  to   lay  g, 


A  BREED  OF  BARREN  METAL  15 

foundation  of  principles,  and  they  must  find  these 
principles  in  nature.  From  that  which  is  they  should 
determine  what  should  be. 

Happily  oT  unhappily,  man  can  for  a  time  disolDey 
moral  law,  provided  he  be  content  to  pay  the  penalty, 
and  what  he  does  is  no  criterion  of  what  he  should  do. 
He  may  fail  through  ignorance  to  take  advantage  of 
nature's  social  laws,  as  he  has  failed  and  still  fails 
through  ignorance  to  apply  the  physical  laws  of  the 
universe.  To  dissipate  this  ignorance  is  the  business 
of  the  sociologist  of  to-day. 

The  foundations  of  sociology  go  to  the  very  bed-rock 
of  society;  its  problems  are  the  problems  of  social  and 
individual  existence.  If  we  can  determine  why  we  live 
and  labor,  and  why  we  organize  society,  we  have  the 
principles  for  determining  how  we  should  live  and  labor 
and  how  we  should  organize  society. 

Looking  at  the  problems  of  human  life  by  the  dim 
light  of  man's  flickering  reason,  we  are  led  to  conclude 
that  happiness  is  man's  aim  and  object  here  below. 
The  pursuit  may  be  conscious  or  unconscious,  the  goal 
may  be  sought  in  this  world  or  the  next,  but  ask  whom 
you  will,  you  will  find  that  his  energies  are  bent  in  the 
pursuit  of  happiness.  All  happiness  is  relative,  not  ab- 
solute. Experience  teaches  us  that  the  greatest  positive 
happiness  lies  in  the  fullest  development  of  all  of  man's 
natural  powers  and  capabilities  and  the  fullest  enjoy- 
ment of  these  developed  powers.  It  is  this  and  njjt 
freedom  from  trivial  pain  which  men  seek.  Every  indi- 
vidual among  the  myriads  born  to  mother  earth  has  a 
right  to  this  free  and  untrammeled  development  and  en- 
joyment of  the  powers  which  he  possesses  equal  to  that 
of  any  other  of  earth's  children.  There  can  be  no  real, 
just  or  lasting  happiness  unless  every  human  being  is 
iiicludt'd.  Our  reason  revolts  at  tlie  idea  of  some  being 
l)()rn  the  puppets  of  others.  In  practice,  both  chisses 
are  unhappy. 

Thn  ideal  state  of  society  is  that  state  which  secures 
all  the  greatest  measure  of  ha])|)ine.'^s  here  below,  and 
any  state  of  society  or  any  institutions,  political  or 
''(Miiiomic,  which  tend  to  develop  a  few  at  the  expensQ 


16  A  BREED  OF  BARREN  METAL 

of  the  many,  are  founded  on  wrong  principles — princi- 
.  pies  which  contradict  the  natural  underlying  law  of  all 
luinian  society.  For  society  is  organized  to  aid  men  in 
reaching  the  ends  to  which  they  all  aspire.  It  is  a 
means  of  securing  happiness  to  man. 

\\'hile  an  ideal  state  of  society  is  not  easily  attained, 
it  is  to  the  ideal  in  sociology  as  well  as  in  every  other 
l)ranch  of  knowledge  that  we  must  look  if  we  would 
jierform  anything  worthy.  It  is  the  divine  ideal  in  the 
sculptor's  mind,  carefully  and  painfully  wrought  out 
under  his  chisel,  which  gives  the  enduring  beauty  to 
the  piece  of  rough, coarse  stone.  It  is  the  sublime  ideal 
in  the  poet's  soul  which,  fashioned  into  words,  thrills 
and  ennobles  and  elevates  the  human  heart.  AU.  art 
strives  toward  the  ideal,  all  science  toward  the  perfect, 
and  it  is  only  as  they  approach  this  goal  that  they 
produce  anything  of  practical  value.  The  deduction  of 
law  is  the  end  and  aim  of  all  classification  and  obser- 
vation. If  we  would  determine  how  far  they  are  adapted 
to  the  ends  for  which  they  are  intended,  institutions  must, 
then,"be  tried  by  ideal  standards.  We  must  not  expect 
to  find  them  perfect,  but  we  must  find  them  tending  to 
perfection  and  not  in  the  opposite  direction;  otherwise 
they  are  founded  on  false  principles  and  certain  to  fall. 

The  natural  laws  under  which  men  live  are  superior 
to  man.  As  part  of  the  universe,  man  is  governed  by 
the  laws  of  the  universe.  His  laws  must  be  in  harmony 
Nvgth  the  laws  of  the  universe.  If  they  are  they  are 
aided  and  strengthened  by  natural  law,  if  they  are  not 
they  are  annihilated  and  their  supporters  crushed. 
There  seems  little  doubt  that  the  laws  of  the  universe 
are  working  for  good,  but  whether  for  good  or  bad, 
they  must  be  obeyed.  In  their  overmastering  might 
they  are  forcing  us  onward  to  some  distant  goal,  to 
some  great  beyond,  and  if  we  do  not  wish  to  court 
annihilation  we  would  do  well  to  place  ourselves 
in  harmony  with  nature's  onward  march.  We  may  then 
use  our  energies  in  enjoying  our  surroundings  and  de- 
veloping our  powers,  instead  of  wasting  them  in  resist- 
ing the  inevitable.  The  smallest  natural  law  can  no 
more  be  resisted  with  impunity  than  the  mighty  cur- 
rent of  Niagara. 


A  BREED  OF  BARKEN  METAL  17 

If,  then,  we  are  ruled  by  an  overpowering  force;  if 
grooves  are  set  and  an  invisible  but  inexorable  power 
is  driving  us  along  these  grooves,  our  first  business  is 
to  locate  these  grooves  and  see  that  we  keep  on  the 
track.  In  other  words,  we  must  discover  the  natural 
laws  which  rule  us  as  a  social  body,  and  see  that  our 
social  fabric  is  reared  in  harmony  with  these  natural 
laws.  We  should  find  out  what  is,  only  for  the  purpose 
of  knowing  what  should  be.  When  a  principle  is  once 
clearly  established  as  a  natural  law,  all  other  laws  must 
bow  to  that  principle. 

Ethics,  the  science  of  correct  human  relations,  is  the 
natural  foundation  stone  of  the  whole  social  fabric, and 
I  propose  to  test  with  the  })rinciples  of  ethics  some  of 
the  principles  applied  in  society- 

As  the  mathematician  finally  puts  the  test  of  axiom- 
atic truth  to  every  principle  of  his  science,  and  by  that 
test  determines  whether  that  principle  must  stand  or 
fall,  so  I  propose  to  test  with  ethical  axioms  the  insti- 
tutions as  I  find  them,  and  thus  determine  their  con- 
flict or  liarmony  with  natural  law. 

The  main  problems  of  social  science  must  be  regarded 
as  still  unsolved.  We  know  that  results  are  unsatis- 
factory. We  know  that  our  most  cherished  institutions 
have  failed  to  bring  about  the  happiness  which  we  all 
seek.  The  question  for  us  to  answer  is, "Why?''  Is  our 
failure  to  accomplish  our  ends  due  to  our  ignoring  nat- 
ural law?  Are  our  misery  and  our  injustice,  our  Avrongs 
and  our  affliction,  the  penalties  for  violating  nature's 
decrees;  or  are  the  laws  of  nature  essentially  vicious 
and  ca[)able  of  producing  evil  residts  only?  These  are 
thequestions  which  political  and  social  science  is  called 
upon  to  solve.         • 

I  know  tl)at  it  is  said  that  political  economy  is  inter- 
ested only  in  things  as  they  are,  that  the  science  is 
|)ractical  and  not  speculative.  What  is  knowledge  for, 
anyway,  if  not  for  the  use  of  man?  If  man  seeks  hap- 
piness why  should  he  not  use  his  reason-acquired  knowl- 
edge to  attain  it?  Is  not  that  most  practical  which 
points  out  to  man  his  errors  of  the  past  and  helps  him  to 
build  better   in  future?     Why  should  we  codify  errors 


18  A  BRKEI>  OF  BARREN  METAL 

iiitd  hiws  and  call  the  aggregation  a  science,  while  there 
are  (ruths  on  which  that  science  may  rest?  It  does  not 
make  them  the  less  errors  that  men  have  adopted  and 
enthroned  them.  The  history  of  the  world  is  but  a 
record  of  the  errors  and  follies  of  mankind.  Happy 
the  nation  without  a  history.  Political  science'  must 
learn  a  lesson  from  mathematical  and  physical  science 
and,  from  failures  and  errors  observed,  learn  truth  and 
success.  The  history  of  sociology  is  no  more  the  sci- 
ence of  sociology  than  history  of  nations  is  the  science 
of  government.  A  catalogue  of  the  principles  used  in 
trade  may  be  useful  in  determining  the  principles  of  po- 
litical economy,  but  they  are  not  the  principles  of  po- 
litical economy. 


CHAPTER    II. 

Disastrous  Phenomena — Periodic  panic — Distress  of  laborers— Paralysis  of 
business — Borrowing  by  the  government-in  times  of  peace  and  prosperity— 
These  phenomena  seemingly  occult — Varied  explanations  contradictory  and 
unsatisfactory— Periodic  distress  seemingly  incident  to  our  industrial  organiza- 
tion— The  optimist-conservative  — His  absurd  empirical  restrictions  to  the  use 
of  intelligence — The  conservative  a  real  anarchist  as  to  all  but  police  power — 
His  inconsistency — His  dogmatic  stand — The  mass  of  citizens  think  otherwise. 

Man  is  hmnanity'fi  greatest  enemi/. 

In  the  world  of  industry  there  are  disastrous  phe- 
nomena which  everybody  has  observed  but  which  no  one 
seems  able  to  explain.  These  strangely  occult  mani- 
festations have  just  recently  been  more  a])parent  than 
ever  before.  The  freest  and  richest  country  on  earth 
has  just  experienced  a  business  depression  the  most 
severe  in  its  history.  Banks  collapsed,  commercial 
houses  closed  and  factories  ceased  to  operate.  Railroad 
equipments  lay  idle  in  the  yards,  steamships  plied 
empty.  Thousands  of  men^ after  stalking  the  streets  of 
their  homes  in  the  vain  search  for  employment,  organ- 
ized themselves  into  bands,  overran  the  country  and 
besieged  the  national  capitol.  Their  cry  was  for  bread, 
for  themselves  and  their  starving  wives  and  children. 
The  general  government  was  compelled  to  coerce  work- 
ingmen  to  yield  to  the  demands  of  their  emphjyers. 
Police  officers  were,  and  still  are,  busy  suppressing  free 
speech  and  action  lest  it  should  lead  to  anarchy.  He 
who  expresses  a  new  thought  is  tabooed  asai]  enemy  of 
society.  The  usual  tax  on  the  commmerce  of  thf  coun- 
try is  not  sufficif^nt  tokeej)  in  motion  the  wheels  of  gov- 
ernment; and  the  nation, after  thirty  years  of  iniexam-_ 
pled  peace  and  prosperity,  is  obliged  to  plunge  further 
into  debt  for  funds  to  carry  on  its  ordinary  functions. 
This  is  not  a  healthy  picture.  It  must  ))e  a  consequence 
of  8ome  principle  at  work  in  our  institutions,  yet  no 
one  seems  to  know  what  that  principle  is. 

19 


20  A  BREED  OF  BARREN  METAL 

Thu  reasons  given  lor  the  strange  situation  are  as 
nuiucroiis  as  the  sources  from  which  they  come.  Ask 
the  politician,  and  he  will  say,  perhaps:  "The  use  of 
silver  as  a  money  metal  is  the  cause  of  hard  times." 
The  man  at  his  elbow,  who  came  from  another  section, 
will  respond:  "Not  so;  the  threatened  demonetization 
of  silver  is  the  element  of  mischief,"  "Good  enough," 
says  a  third,  "but  the  main  cause  of  distress  is  the  tar- 
iff."  "I  beg  to  differ, "  breaks  in  another,  "the  fear 
that  the  tariff'  will  be  meddled  with  is  ruining  the  busi- 
ness of  the  country."  "Want  of  confidence,  that  is 
our  trouble, "  wisely  remarks  a  philosopher.  Confidence 
in  what?  But  the  meaningless  platitude  will  not  admit 
of  specific  statement.  Another  set  of  "thinkers"  do 
not  know;  "such  panics  are  necessary  and  their  causes 
entirely  occult." 

The  United  States  experienced  a  like  panic  in  1878, 
and  the  causes  to  which  it  was  attributed  were  quite  as 
vague  and  varied.  The  panic  of  1857  was  as  marked, 
its  cause  quiet  as  indefinite.  The  panic  of  1837  was 
caused  by  Jackson  and  his  trouble  with  the  banks,  or 
almost  any  other  cause  one  might  name. 

The  panics  of  '48,  '84,  '64,  '24,  etc., were  fully  as  in- 
explicable. 

We  may  search  the  financial  histories  of  countries 
with  industrial  systems  similar  to  our  own,  and  we  shall 
find  that  in  all  crises  occur  with  more  or  less  regular 
periodicity.  England  has  had  them  for  hundreds  of 
years. 

There  are  those  who  see  no  menace  in  this  periodic 
business  prostration.  They  piously  assert  that  it  is  nat- 
ural and  necessary  and  it  is  useless  to  fight  against  it. 
"Any  move  toward  change  is  an  absurd  attempt  to 
make  the  world  over  again;  any  one  who  sees  a  wrong 
is  a  "calamity  howler, "  whatever  that  may  be.  Al- 
though man  has  developed  the  present  luscious  apple 
from  the  sour  and  meager  crab;  although  he  has  devel- 
oped the  ponderous  draft  horse  and  the  lithe,  supple 
racer  from  the  little,  long-haired,  ungainly  pony;  al- 
though he  has  produced  the  massive  Durham  or  Hereford 
from  the  little,  nerv^ous, long-horned  ox  of  olden  times, 


A  BREED  OF  BARREN  METAL  21 

lie  is  powerless  to  use  his  reason  to  better  his  own  con- 
ditions. The  beautiful  watch-dog,  the  truest  friend  of 
man, has  been  bred  from  the  treacherous,prowling  wolf, 
by  man's  intelligence.  Steam  has  been  harnessed  to 
do  man's  bidding  and, by  means  of  it, industry  has  been 
revolutionized;  gardens  have  been  made  of  deserts  and 
deserts  of  gardens;  the  whole  face  of  nature  has  been 
transformed  by  man's  intelligence;  yetw-eare  told  that 
using  that  intelligence  to  regulate  the  relations  of  man 
to  man  is  absurd  and  foolish.  It  is,  in  the  language  of 
those  philosopher-dilettanti,  "really  quite  ridiculous" 
for  human  I'eings  to  use  intelligence  in  ameliorating 
social  conditions. 

Such  stutT  as  this  would  be  considered  too  utterly 
nonsensical  to  require  even  a  passing  notice  but  for  the 
fact  that  newspapers  and  periodicals  of  the  highest 
standing  lend  their  columns  to  the  preaching  of  this 
doctrine  of  infantile  social  impotence. 

Puerile  aristocrats  seem  to  forget  that  it  is  by  human 
intelligenc3  that  all  government  has  been  established. 
If  it  were  not  for  the  use  of  more  or  less  human  intel- 
ligence in  regulating  the  conditions  of  men,  the  phys- 
ically strong  would  still  l)e  masters  of  the  rest  of 
mankind, and  nine-tenths  of  the  human  race  would  still 
be  in  a  state  of  chattel  slavery.  If  it  were  not  for  a 
modicum  of  intelligence  exerted  in  fixing  the  relations 
of  man  to  man,  neither  property  nor  personal  rights 
would  have  any  security  whatever.  Our  institutions 
may,  to  some  extent,  be  growths,  but  yet  they  are  crys- 
tallized by  human  intelligence  from  the  mother  liquor 
of  crudity  and  barbarism. 

The  patrician  apologist  for  a  Chinese  conservatism 
in  treating  things  that  are,  would  not  be  flattered  to 
be  called  ati  anarchist, but  ho  is  more  deserving  of  that 
title  than  1h<j  majority  of  persons  to  whom  it  is  a]i]dii'(l. 
He  inveighs  against  the  very  foundation  prineij)les  of 
goverinnent.  If  it  is  absurd  and  foolish  to  try  to  reg- 
ulate tlie  relations  of  man  to  man,  then  all  government 
is  absurd  and  foolish,  for  government  is  but  an  attempt 
to  regulate  tlie  relations  of  man  to  man.  If  it  is  prac- 
ticable to  regulate  these  relations  or  even  modify  them 


•2'2  A    RHEED    OK    BARREN    METAL 

in  one  respect  it  is  in  all,  and  an  attempt  in  one  direc- 
tion is  no  more  absurd  than  une  in  another  direction. 
There  is  no  generic  difference  in  men  associating  them- 
selves together  for  the  purpose  of  securing  to  each  his 
life  and  propert}'  from  the  assaults  of  the  armed  bandit 
than  in  associating  themselves  together  to  resist  the 
encroachments  of  the  industrial  bandit  >vhose  weapons 
are  wealth  and  unscrupulous  cunning.  Yet  one  is  lauded 
to  the  skies  and  the  other  is  said  to  be  absurd  and 
foolish.  We  have  a  school  of  soi-disant  philosophers 
who  advocate  anarchy,  in  everything  except  the  police 
power  of  government,  and  why  they  do'not  in  that 
is  not  quite  clear.  Their  physical  courage  is  probably 
lacking. 

These  same  patricians  and  their  apologists  see  no 
wrong  in  overgrown  fortunes, no  menace  to  liberty.  The 
multi-millionaire  is,  they  assert,an  unmixed  good  with- 
out whom  the  poor  would  be  infinitely  worse  off  than 
now.  They  do  not  condescend  to  give  reasons  for  such 
assertions, but  state  dogmatically  that  such  is  the  fact. 
Great  inequality  in  wealth  is  desirable  as  well  as  ad- 
vantageous. It  is  well  that  one  man  may  be  able,  with- 
out the  least  inconvenience  to  himself,to  smoke  cigars 
and  drink  wine  to  the  value  of  several  dollars  each  day, 
although  he  renders  no  service  whatsoever  to  any  one; 
while  others,  who  toil  unceasingly  in  the  production  of 
wealth,  must  be  content  to  live  and  rear  a  family  on  a 
dollar  or  two  per  day.  We  might  point  out  that  this 
is  contrary  to  the  maxim  of  justice:  "To  every  one  ac- 
cording to  his  works.''  We  might  show  by  hundreds  of 
instances  that  the  man  with  millions  is  dangerous  to 
popular  government,  because  he  may  influence  elections 
and  legislation  for  selfish  ends  and  pass  laws  contrary  to 
the  will  of  the  people.  We  might  show  that  the  vastly 
wealthy  may  corrupt,  degrade  and  oppress  the  citizen 
:iud. subvert  the  institutions  of  a  great  nation.  We 
might  show  that  under  the  influence  of  enormously 
wealthy  individuals  prcjperty  might  be  held  more  sacred 
than  human  life  or  liberty,  and  freedom  might  become 
a  hollow  mockery.  We  might  show  that  neither  hap- 
piness nor  material  prosperity  can  long  survive  the  fall 


A  BREED  OF  BARREN  METAL  23 

of  individual  liberty.  We  might  show  that  the  accu- 
mulation of  large  fortunes  by  the  few  at  the  expense  of 
the  many,  has  actually  tended  to  produce  the  above 
results;  but  of  course  the  plutocrat  or  his  apologist 
could  see  no  wrong  in  all  this,  and  the  eftort  would  be 
useless.  He  is  not  even  moved  by  the  extreme  degra- 
dation of  abject  poverty  nor  the  menace  to  civilization 
of  poverty-bred  barbarism.  He  is  too  much  wrapped 
up  in  selfishness  to  see  or  acknowledge  anything;  but 
fortunately  for  the  country', there  are  not  many  so  mor- 
ally and  intellectually  obtuse  as  he. 

The  majority  will  not  deny  that  a  grave  problem  con- 
fronts the  race, and  that  we  are  still  far  from  its  solu- 
tion. Most  men  ditfer  only  on  the  method  of  solution, 
or  on  the  question  of  whether  the  problem  be  capable  of 
solution  at  all. 

Never  before  in  the  history  of  the  world  have  so  many 
plans  for  the  relief  of  humanity  been  brought  forward 
as  in  the  last  twenty  years.  This  economist  sees  in 
profit-sharing  the  full  measure  of  human  felicity.  The 
remedy  of  that  one  is  the  full  control  by  the  state  of 
all  oI)jects  of  monopoly.  One  asserts  that  the  organi- 
zation of  laborers  is  the  panacea  for  all  social  ills;  an- 
(jther  sees  salvation  in  the  education  of  the  masses. 
Another  believes  in  the  single-tax,  and  another  still  in 
military  socialism. 

Th(^  industrial  conditions  of  the  immediate  past,  if 
not  of  the  present,  are  more  than  a  problem.  The}'  arc; 
the  symptoms  of  social  disease  calling  for  prompt  and 
effectual  relief.  The  most  dangerous  manifestation  of 
tliis  ailment  is  the  unequal  distribution  of  wealth. 


CHAPTER    III. 

The  Distribution  OF  Wealth — Distribution  dependent  on  the  elements  enter- 
ing into  the  productionof  wealth  —What  these  elements  are — Land,  the  Laborer 
and  Capital — Problem,  to  ascertain  what  portion  of  product  goes  to  Landlord, 
Laborer  and  Capitalist — The  term  '  Laborer"  defined — Wages  defined. 

We  may  divert  the  stream,  but  cannot  stop  it. 

Men  toil  as  long  and  arduously  as  ever  and  their  toil 
is  far  more  productive,  yet  those  who  toil  become  none 
the  richer.  The  more  wealth  produced,  the  more  idlers 
there  are  to  use  it  and  the  greater  the  number  of  peo- 
ple clamoring  for  bread.  The  mol'e  productive  the  toil- 
er's work,  the  more  extravagant  become  the  lives  of 
those  who  toil  not.  Ever  is  there  found  a  way  to  di- 
vert this  hard-earned  wealth  into  the  laj)  of  luxurious 
ease.  A  woman  who  never  produced  a  dollar's  worth 
of  wealth  or  anything  else,  will  spend  enough  on  one 
gown  to  keep  half  a  dozen  families  of  laborers  for  a 
year.  Her  husband  or  father  or  brother,  or  whoever 
she  depends  upon  nominally,for  support, if  she  does  not 
levy  her  tribute  directly,  is  as  idle  as  herself. 

The  young  millionaire  who  never  accomplished  a  task 
useful  to  anybody  except  himself,  if,  indeed,  to  himself, 
spends  enough  on  one  debauch  to  educate  and  start  in 
business  the  son  of  a  productive  toiler.  What  is  wasted 
])y  the  wealthy, in  excess  of  that  which  is  required  to  give 
them  a  good  livelihood  and  gratify  legitimate  pleasures, 
would  probably  feed  the  hungry,  clothe  the  ragged  and 
shelter  the  homeless  of  the  land.  It  would  at  least 
furnish  a  means  of  giving  work  to  the  idle  and  making 
them  self-supporting.  Why  is  it  not  used  for  these 
purposes?  Where  does  the  wealth  that  is  so  lavishly 
squandered  by  the  rich  come  from? 

It  certainly  does  not  make  itself,  as  we  shall  see  here- 
after.    It  is  evidently  a  portion  of  what  numerous  la^ 

§4 


A  BREED  OF  BARREN  METAL  25 

borers  produce,  and  the  i'uniilies  of  these  men  have  not 
at  the  same  time  enough  to  eat.  We  assert  by  our 
laws  that  these  luxurious  idlers  have  the  right  to  revel 
in  the  laborers'  wealth. 

Why,  then,  are  tlie  masses  so  poor?  Evidently  be- 
cause the  classes  are  so  rich.  There  is  not  wealth  enough 
to  go  around  when  so  much  is  wasted.  Where,  then, 
should  intelligent  beings  look  for  the  cause  of  poverty 
and  distress?  Manifestly  in  the  artificial  economic 
laws  which  derange  distribution  by  allowing  luxurious 
idlers  to  take  a  i^ortion  of  the  laborers'  toil. 

If  one-half  the  members  of  a  family  are  spendthrifts, 
it  is  easy  to  determine  why  the  industry  of  the  other 
half  will  not  thrive.  Why  does  not  the  same  rule  ap- 
ply to  the  great  national  family?  If  there  was  a  rule  by 
which  two  brothers  could  take  the  bulk  of  the  wealth 
produced  by  the  industry  of  two  others,  and  live  in  ease 
upon  it  while  the  two  who  toiled  remained  upon  the 
borderland  of  want,  all  could  easily  see  the  injustice  of 
the  proceeding.  But  when  the  two  parasitic  brothers 
increase  to  hundreds  of  thousands,  and  the  toilers  to 
inillions,  we  tacitly  admit  that  the  idlers  of  the  family 
have  a  right  to  the  wealth  the  toilers  produce.  That  the 
wealth  which  they  use  is  what  the  toilers  produce,  I 
hope  to  show  hereafter,  as  well  as  to  point  out  the 
method  by  which  it  is  taken.  Nobody  who  understands 
the  situation  will  have  the  hardihood  to  say  that  such 
a  proceeding  is  just  either  in  the  case  of  the  four  or  the 
millions;  and  whatever  the  edict  of  popular  prejudice 
and  ignorance,  aspiring  teachers  and  philosophers 
should  not  hug  vain  delusions.  Nearly  all  tacitly  admit 
that  the  results  of  ihe  distribution  of  wealth  are  not 
what  they  should  be.  Wealth  is  distributed  according 
to  fixed  laws.  There  are  certain  rules  as  to  wiiat  per- 
centage of  the  results  of  production  shall  go  to  the  toil- 
ers, and  to  the  possessors  of  accumulated  wealth.  If 
these  rules  were  just,  their  results  must  be  just.  But 
the  result  of  these  rules  appears, to  the  thinker  at  least, 
a  monstrous  injustice.  The  rules  themselves  must  l)e 
unjust.  We  have,  to  say  the  least,  ground  for  suspect- 
ing their  inju-^1  ice.     The  most  important    rules   of  dis- 


-(>  A    BKEED.OF    BARREN    METAL 

tributioii  are  the  laws  of  rent  and  interest.  They  are 
the  basis  of  our  economic  system.  They  must  be  taken 
before  the  bar  of  justice.  The  condition  of  the  super- 
structure demands  it.  The  relations  of  the  classes  and 
the  masses,  as  well  as  the  state  of  business,  loudly  cry 
for  a  re-examination  of  the  basic  laws  of  our  economic 
system.  The  laws  of  rent  have  been  examined  by  a 
master  whose  work  I  shall  not  attempt  to  improve 
upon.*  I  shall  refer  to  them  only  sufficiently  to  make 
other  matters  clear.  I  will  examine  the  justice  of  in- 
terest-taking and  its  influence  upon  the  distribution  of 
wealth. 

Three  elements  enter  into  the  production  of  wealth: 
land,  the  laborer  and  capital,  for  which  are  paid  re- 
spectively rent,  wages  and  interest,  or  capital  profits. 
Rent  goes  to  the  landlord,  capital  profits  or  interest 
to  the  capitalist, and  wages  to  the  laborer.  These  three 
get  practically  all  of  the  gross  product  of  industry.  If 
they  receive  their  returns  in  just  proportion,  the  ine- 
quality, the  want,  the  misery  of  the  earth  are  absolutely 
necessary  and  it  is  foolish  and  vain  to  rail  against  these 
conditions  or  ask  for  change.  If  the  capitalist,  laborer 
and  landlord,  each  gets  his  just  proportion  of  the  wealth 
produced,  the  question  is  forever  closed.  We  may  plead 
with  him  who  gets  the  greater  share  to  divide  it  with 
his  brothers,  but  we  cannot  ask  him  to  do  so  on  the 
ground  of  justice, much  less  ask  the  government  to  coerce 
Jiim  to  do  so.  The  problem,  then,  is  to  ascertain  what 
])roportion  of  the  wealth  produced  goes  to  the  toiler  as 
such,  the  capitalist  as  such,  and  the  landlord  as  such. 
It  is  necessary  to  ascertain  what  each  claims  and  what 
each  receives  and  what  right  he  has  to  it.  When  that 
shall  have  been  fully  accomplished, with  how  and  why, 
'■('onomic  science  will  have  completed  its  mission. 

I  use  the  term  "laborer"  in  its  broadest  sense, includ- 
ing in  that  category  all  who  toil  with  either  hand  or 
l)rain  to  add  to  the  gross  assets  of  the  human  race; 
but  I  rigidly  exclude  all  whose  efforts  of  either  hand  or 
brain  are   directed  to  taking  from  others  what   others 

''While  there  are  many  of  the  details  of  thfc  theory  of  Henry  George  which  I 
cannot  accept,  I  believe  his  main  idea  to  be  correct.  I  do  not  deem  his  remedy 
quite  eftective. 


A  BREED  OF  BARREN  METAL  27 

produce.  I  exclude  all  of  those  employed  in  transfer- 
ring the  title  of  wealth  from  one  to  another  without 
giving  an  equivalent  for  the  wealth  transferred;  rather 
than  in  wringing  from  nature  something  which  will  add 
to  the  wealth  of  all.  He  is  not  a  productive  toiler  who 
abandons  the  ranks  of  those  who  combat  with  nature 
for  sustenance  and  advancement,  and  skulks  in  the  rear 
of  the  army  employing  his  brain  and  muscle  to  appro- 
priate the  spoils  of  the  hard  fought  battle. 

Wages,  or  the  remuneration  of  labor  in  the  sense  in 
which  I  use  it,  would  include  wages  of  superintendence, 
wages  of  necessary  financiering,  wages  of  management; 
in  fact,  all  remuneration  for  human  services  which  are 
instrumental  in  adding  to  the  sum  total  of  the  products 
of  the  people's  industry.  I  use  the  terms  broadly  in 
this  discussion,  so  that  there  may  be  no  confusion  aris- 
ing from  the  fact  that  the  capitalist  isoftenera  laborer 
or  a  landlord  also.  What  he  receives  as  a  toiler  we 
will  charge  to  the  account  of  wage.s,  what  he  receives 
as  a  capitalist  to  the  account  of  interest  or  capital  prof- 
its, and  what  he  receives  as  landlord  to  the  account  of 
rent. 


CHAPTER    IV. 


The  Laborer — Is  he  overpaid?— What  he  receives— What  it  costs  to  live — Com- 
mon experience  rather  than  made  conditions — The  census  figures — Bread  and 
soup  economists — Tlie  pay  of  clerks— 1  he  remuneration  of  laborers— Farmers 
-The  remuneration  of  sweaters  and  shop  girls — The  social  evil  and  its  rela- 
tion to  wages — A  reform  work  for  women — The  army  of  unemployed — The  con- 
clusion that  the  remuneration  of  the  laborer  is  not  too  great— If  he  is  entitled 
to  more,  he  needs  it — The  only  means  by  which  higher  wages  may  be  paid. 

"  What   thou   wouldst  highly,  that  ivouldst  thou  holily, 
Wouldst  not  vlay  false,  and  yet  woiddst  ivrongly  win."' 

Leaving  for  the  present  the  question  as  to  whether 
the  toiler  has  a  right  to  greater  remuneration  for  his 
labor,  let  us  inquire  whether  the  remuneration  which 
he  does  actually  receive  is  too  little  or  too  much; 
whether  it  is  desirable  that  he  should  receive  more. 

An  examination  of  the  average  wages  of  toilers  will 
convince  one  that  those  who  do  the  work  of  the  country 
are,  at  least,  not  overpaid.  The  census  of  1890  gives 
about  $445  per  annum  as  the  average  w-ages  of  persons 
engaged  as  employes  in  the  manufacturing  industries. 
Experience  teaches  all  of  us  that  this  estimate  is  very 
hirge.  Anyone  who  takes  an  interest  in  the  subject  can 
in  any  city  find  thousands  of  laborers  working  for  less 
than  a  dollar  per  day,  and  wages  over  one  and  one-half 
dollars  per  day  are  the  exception  in  occupations  re- 
quiring little  skill.  But  taking  even  the  census  figures 
as  correct,  the  average  given  includes  the  wages  of 
skilled,  high-priced  mechanics  and  foremen;  hence  some 
of  the  laborers  must  necessarily  work  for  much  less 
wages  tban  the- average  given  by  the  census  compilers. 

No  one  who  has  lived  in  a  city  of  over  fifty  thousand 
inhabitants,  the  places  where  the  bulk  of -our  manufac- 
turing interests  are  located,  will  assert  that  a  family 
can  be  fed,  clothed  and  educated  as  the  citizens  of  a 
free  nation  should  be,  for  four  hundred  and  forty-five 

28 


A  BREED  OF  BARREN  METAL  29 

dolJars  per  annum.  Rent  itself,  or  rent  and  street  rail- 
way charges,  will  reduce  the  sum  to  three  hundred  dol- 
lars. Even  at  this  figure  the  family  must  live  in  the 
cheapest  and  humblest  of  dwellings. 

Seventy-five  dollars  per  annum  is  the  least  possible 
amount  on  which  a  family  of  four  can  be  clothed.  This 
would  leave  but  seventy-five  cents  per  day  for  food,  fuel 
and  incidental  expenses,  such  as  medicine  and  doctor's 
bills.  Whatever  the  apostles  of  soup-bones  and  neck- 
steak  may  figure  out  as  the  cost  of  living,  any  one  who 
has  tried  to  live  decently  in  a  city  on  less  than  six  hun- 
dred per  year,  has  found  himself  confronted  by  a  most 
difficult  problem.  .The  very  fact  that  the  greater  num- 
ber of  bread  and  soup  economists  spend  twenty  times  as 
much  on  their  own  families  as  the  amount  which  they 
say  is  enough  for  the  family  of  the  laborer,  would  brand 
their  estimates  as  totally  worthless.  Then  if  four  hun- 
dred and  forty-five  dollars  per  annum  is  ^n  inadequate 
remuneration,  one  on  which  the  toiler  can  scarcely  ex- 
ist, much  less  provide  for  the  contingencies  of  the  fu- 
ture, how  do  those  live  who  get  but  one  dollar  or  less 
per  day  and  that  for  a  part  of  the  year  only?  This  is 
the  condition  of  the  common  laborer.  I  am  sure  he  is 
not  overpaid.  If  he  has  a  right  to  more  he  has  use  for 
it. 

The  census  estimates  of  the  wages  of  officers  and 
clerks  of  manufacturing  corporations  are  quite  worth- 
less. At  least  the  average  wages  of  this  class  gives  no 
idea  of  the  wages  of  the  extremes.  The  average  wages 
are  given  at  about  eight-hundred  and  thirty  dollars  per 
person  per  year,  yet  as  this  result  averages  together 
thirty-doHar-per-month  clerks  and  fifty-thousand-per- 
year  (rijr[)oration  officers,  it  gives  no  idea  of  what  are 
the  wages  <jf  the  greater  number.  Our  experience  has 
taugiit  us  that  the  average  wages  of  the  clerk  is  much 
below  the  figures  given  and  the  average  wages  of  the 
officers  or  firm  member  almost  infinitely  above  it.  The 
average  clerk  in  our  cities  lias  a  good  deal  of  trouble 
to  make  ends  meet,  while  some  corporation  ofiicers 
are  much  <)V<;rp;ii(l.  This  is  especially  triin  of  railway 
and'l)ank  (jllicials  in   some   localities,  while  in  others 


30  A  BKEED  OF  BARKEN  METAL 

the  incomes  of  thests  men  come  from  interest  and  capi- 
tal profits  almost  exclusively.  Indeed  where  a  corpo- 
ration officer  is  paid  over  five  thousand  per  year,  his 
wages  represent  capital  profits  rather  than  "services, 
for  five  thousand  dollars  per  year  will  secure  the  best 
energy  and  mind  of  the  country.  But  more  of  this 
hereafter. 

There  is  no  way  to  get  at  the  exact  wages  of  the  farm 
laborer,  but  it  is  undoubtedly  ridiculously  small.  About 
forty-three  and  one-half  millions  of  persons  live  in  the 
country,  and  nearly  all  depend  for  livings  directly  or 
indirectly  on  the  products  of  the  farm.*  This  product 
is  but  $2,460,000,000  per  year.  It  pays  charges  other 
than  wages,  of  at  least  half  a  billion.  Now  divide  the 
remainder  among  the  nine  million  or  so  of  toilers  who 
live  in  the  country,  and  each  is  given  the  magnificent 
sum  of  $216  to  live  upon  for  a  year  and  support  the 
three  or  four  others  dependent  upon  him.  If  we  include 
services  in  the  estimate  but  about  one-sixth  of  the 
wealth  produced  is  jiroduced  on  the  farm  and  two-thirds 
of  the  population  tries  to  live  upon  it. 

Any  one  who  within  the  last  few  years  has  seen  life 
on  the  farm,  with  its  unending,  lonely,  dismal  round 
of  drudgery  from  "sun  to  sun,"  with  its  pinching  and 
shaving  to  make  ends  ineet,  while  the  mortgage  ever 
gets  a  firmer  grip  (unless  he  be  an  Atkinson),  needs  no 
long  drawn  out  argument  to  convince  him  that  the  toil- 
er on  the  farm  gets  none  too  much  for  his  labor.  The 
honest  observer  cannot  deny  that  the  small  farmer  and 
the  farm-laborer  are  being  pushed  by  the  grim  might 
of  poverty  close  to  the  danger  line  which  separates  the 
sturdy  yeoman  citizen  from  the  ignorant,  squalid  peas- 
ant   of  the  old   world.     If  those   who  are   inveighing 

*lii  Census  Bullelin  99  the  following  table  of  gainful  occupations  is  given: 

il)  AgiicuUiire,    fisheries  and  mining 9,013,201 

[2]  Professional  service 944,323 

(3)  Domestic  and  personal  service 4,360,506 

(4)  Trade  and    transportation 3,325,962 

(.=>)  Manufacturing  and   mechanical    industries  5,091,699 

Total 22,735,661 

Portions  of  thf- second  and  third  classes  are  dependent  on  agricultural  product 
for  a  living,  swelling  the  workers  to  be  paid  from  agricultural  returns  a  little 
short  of  ten  millions,  and  making  the  whole  population  dependent  thereon' 
nearly  up  to  the  Census  figure  for  country  residents. 


A  BREED  OF  BARKEN  METAL  81 

against  foreign  pauper  labor  would  use  some  of  their 
energies  to  save  the  American  laborer  from  the  same 
fate,  they   would  be  working   more  to  the  purpose. 

We  have  thus  far  been  speaking  of  the  relatively  pros- 
perous laborer.  We  have  not  taken  into  account  the 
sweater  whose  pittance  is  so  inconsiderable  that  it  is 
amazing  that  any  one  can  live  upon  it.  Then  we  have  the 
underpaid  factory  girl,  and  the  shop  girl  who,  scarcely 
earning  enough  to  keep  body  and  soul  together,  is 
obliged  very  often  to  resort  to  other  means  to  accom- 
plish that  end.  When  a  girl  is  asked  to  work  in  the 
shops  of  our  big  cities  at  from  three  to  six  dollars  per 
week,  and  is  told  by  her  employer  or  his  agents  how 
she  may  pleasantly  supplement  this  pittance,  it  is  not 
difficult  to  see  why  there  is  a  social  evil  of  ponderous 
proportions.  Compelled  to  dress  well  to  hold  her  po- 
sition, unless  she  be  fortunate  enough  to  live  with  par- 
ents, she  has  the  alternative  of  want  or  dishonor.  Ohy 
ye  luxurious,  complacent  matrons  who  wine  and  dine 
and  sit  on  velvet  cushions  on  Sundays,  and  listen  to 
metaphysical  discourses  which  aim  at  nearly  nothing, 
are  not  you  ashamed  that  your  ease  and  complacency 
is  often  earned  at  the  expense  of  the  soul  of  your  poor 
sisters,  who  if  given  but  their  just  share  of  what  you 
squander  would  be  as  honorable  as  you?  Ye  woman 
suffragists  and  W.  C.  T.  U.'s,  there  is  missionary  work 
for  you  in  your  (nvn  churches  among  your  own  hus- 
bands, brothers  and  sisters.  Teach  the  women  who  lead 
the  society  of  our  great,  cold,  extravagant  cities  to  spurn 
the  luxury  which  is  wrung  from  the  want  of  poor  toil- 
ing fellow-women,  teach  them  to  honor  men  who  would 
rather  be  just  than  to  lie  or  cheat  or  oppress  to  gratif}' 
the  vanity  of  the  woman  he  loves,  and  you  will  have 
done  more  for  humanity  than  you  can  do  by  a  century 
of  preaching  virtue  and  practicing  and  a]iplaudiug 
wr<jng  and  o])|)r('ssion.  Men  have  done  more  wrong  to 
gratify  f<'minin<'  vanity  than  from  all  other  motives 
coniljincd.  Oni'  of  the  greatest  wrongs  of  (o-day  is  the 
starvation  wages  of  the  shop-girl. 

All  this  in  passing.    It  is  evident  that  even  th(.)se  who 


32  A  BREED  OF  BARREN  METAL 

are  not  in  need  of  work  are  underpaid  for  what  theydo. 
But  this  is  not  all. 

It  goes  without  saying  that  the  industry  of  the  na- 
tion should  be  sufficiently  productive  to  support  all  of 
its  inhabitants  with  reasonable  comfort.  Yet  we  have 
more  than  a  million  of  laborers  willing  to  work  who 
are  obliged  to  subsist  on  a  pittance  doled  out  by  char- 
ity. Even  of  those  who  do  work  during  their  days  of 
strength  and  vigor,  one  out  of  ten  goes  to  a  pauper's 
grave  and  two  of  the  remaining  nine  are  saved  from  the 
potter's  field  through  the  munificence  of  friends.  At 
the  wages  received,  it  is  utterly  impossible  for  the  com- 
mon laborer  to  provide  for  his  declining  years.  • 

From  whatever  standpoint  we  view  it,  we  must  de- 
cide that  the  remuneration  of  the  laborer  is  too  small 
rather  than  too  great.  This  is  the  fact  noted  by  all  im- 
partial observers.  Every  statesman  ])reaches  and  every 
i'eformer  asserts  that  higher  wages    are  desirable. 

Methods  by  which  higher  wages  may  be  paid  are  as 
much  sought  as  was  ever  the  philosopher's  stone.*  Pro- 
tectionists and  free  traders,  gold  men,  silver  men  and 
greenbackers,  populists,  trust  advocates  and  million- 
aires, all  avow  that  what  they  do  is  to  bring  about 
higher  wages.  But  higher  wages  can  come  only  by 
trenching  on  the  remuneration  of  the  landlord  or  the 
capitalist  or  both,  for  they  get  all  the  product  which 
does  not  go  to  the  laborer.  With  the  same  amount  of 
capital  emplo3"ed  and  the  same  amount  of  land  and  the 
same  amount  of  labor  and  skill, other  circumstances  be- 
ing equal, the  product  is  constant.  The  only  wa}^  to  give 
more  to  one  of  the  three  classes  among  whom  that  pro- 
duct is  divided,  is  to  give  less  to  one  or  both  of  the  other 
classes.  The  important  question  to  be  solved  is,  has 
the  laborer  a  right  to  more  of  the  product  and  the  land- 
lord and  capitalist  to  less? 

*It  is  strange  to  see  on  one  side  of  a  newspaper  a  long  article  showing  that 
Sl.^  00(1  per  year  was  not  an  extravagant  allowance  for  a  child  not  yet  in  its  teens, 
and  on  the  next  page  one  showing  that  laborers  are  well  paid  at  a  dollar  or  so 
per  day  and  that  they  have  really  nothing  to  complain  of. 


CHAPTER  V. 

The  Margin  OF  Profits— Some  figures  on  the  actual  shares  of  the  products  of 
industry  received  by  *he  several  classes— Mr.  Atkinson's  cotton  mill— The 
share  of  the  laborer — The  remainder  goes  to  keep  up  wealth  and  remunerate 
the  capitalist  and  landlord— Ten  to  tifteen  per  cent  upon  capital  employed, 
theprobable  margin  of  profits— This  includes  interest  and  rent— It  applies  to 
successful  enterprises  only--Census  figures— Their  indehniteness— The  margin 
small— To  whom  shall  it  go?  the  vital  question. 

"'Our  sins  return  to  plague  ws." 

It  is  extremely  clifHcult  to  give  precise  figures  as  to 
the  actual  distribution  of  the  gross  products  of  the  na- 
tion's industry,  but  from  census  figures  and  other 
sources  this  may  be  approximated.  According  to  Mr, 
Atkinson's  real  or  imaginary  cotton  mill,  the  laborers 
in  a  single  process  of  production  get  28  per  cent  of  the 
gross  product.  This  includes  clerk  hire  and  the  laljor 
of  transportation.  In  the  production  of  raw  materials 
thi'  laborer  gets  a  somewhat  larger  share  of  the  gross 
product,  S(j  that  following  an  article  through  the  succes- 
sive stages  of  production  from  the  time  the  raw  materi- 
als are  taken  horn  mother  earth  to  the  time  the  product 
is  given  into  the  hands  of  the  consumer,  the  laborer 
gets  something  more  than  fifty  per  cent  of  the  total  gross 
])ro(luct.  The  rest  of  the  product  is  absorbed  by  the 
landhjrd  and  capitalijit  and  used  in  offsetting  the  nat- 
ural deterioration  and  loss  to  which  wealth  is  subject. 
A  portion  of  the  product  received  by  the  laborer  is  used 
in  the  j^ayment  of  taxes,  as  is  also  a  portion  of  that 
which  falls  to  the  nhare  of  the  landlord  and  capitalist. 
Atkinson  figures  out  that  there  is  but  six  per  cent 
left  to  the  capitalist,  or  sixty  thousand  dollars  on  a 
capital  investment  of  a  millitjn,  after  all  other  charges 
are  paid,  and  this,  too,  where  business  is  done  on  a  very 
large  and  economic  h(%'i1<!.  A  portion  of  this  is  capital 
]>rofit  or  interest  and  a  pcjrtion  land  rent.     This  is  net. 


H4  A  BREED  OF  BARREN  METAL 

whilfi  the  gross  return  to  the  laborer  is  given.  If  we 
first  allow  for  charges  for  keeping  up  capital  and  insur- 
ing against  loss,  we  should  allow  the  laborer  enough  to 
keep  up  his  strength  and  produce  his  kind  as  well  as 
insure  his  life  before  we  reckoned  his  wages.  But  even 
as  a  net  profit  this  is  on  an  average  too  small  for  the 
returns  of  successful  business  enterprises.  The  business 
man  counts  on  his  capital  paying  interest  at  about  six 
per  cent,  a/3  well  as  profits  or  dividends  of  about  the 
same  amount,  which  would  make  the  net  return  to  the 
capitalist  and  landlord  about  twelve  per  cent  of  the 
gross  product  of  industry. 

According  to  the  figures  of  the  census  for  1890,  but 
about  ten  per  cent  of  the  gross  product  was  retained 
by  the  capitalist  as  profits  and  interest,  making  the 
return  for  the  capital  invested  about  fourteen  per  cent. 
This  is  not  exact,  as  capitalist  and  landlord  profits  en- 
ter to  some  extent  into  the  item  of  miscellaneous  ex- 
penses as  well  as  thatof  salaries  of  officers  and  members 
of  firms. 

Then,  in  the  census  estimates,  no  allowance  is  made 
for  the  charge  for  deterioration  of  capital, which  would 
amount  to  two  and  (jne-half  or  three  per  cent  of  the 
gross  product.* 

All  this  goes  to  show  that  the  margin  of  profits  is  not 
large,  and  the  vital  question  is,  to  whom  do  these  j)rofits 
belong?  If  they  should  go  to  increase  the  wages  of  the 
laborer,  they  would  be  found  sufficient  to  give  employ- 
ment to  the  involuntarily  idle  and  save  those  who  do 
work  from  the  pinch  of  poverty.  If  they  rightly  go  to 
the  support  of  the  idle  rich  there  is  no  cure  for  poverty 
and  want.  Of  course  with  more  productive  workers, 
more  would  be  produced. 

*In  the  summary  prefacing  extra  Census.Bulletin  No.  67  we  have  the  follow- 
ing statement  of  expenses  of  manufacturing;  Miscellaneous  expenses,  $630,944,- 
()58;  total  wages,  82,282,823,26.5,  total  wages  lofficers,  firm  members  and  clerks), 
8391,914,518;  all  other  employes,  total  wages,  81,890,908,747;  cost  of  material,  $5,158- 
868,3.53.     The  total  value  of  products  is  given  at  $9,370,107,724. 


CHAPTER  VI. 

The  Landlord — His  right  to  reruuneratioa  — Land  defined— Ricardo's  definition 
— The  significance  in  which  it  is  hare  ussd— Minas  not  land  in  the  sane  sense 
as  farming  land  or  building  sites— Forasts  not  land,  unless  cultivated— The 
natural  basis  of  property — What  one  proiucas  is  primarily  his  own — Wliat  he 
does  not  produce  or  what  another  produces  is  not  primarily  his  own— Land 
not  produced  by  individuals-Does  not  belong  to  individuals— Belongs  to  the 
community  in  usufruct  only— Community  can  give  no  greater  title  than  it 
possesses— The  collection  of  rent  doas  not  aid  productivity— No  return  given 
by  landlords  for  rent  taken  ^An  imposition— Royalties  in  the  same  cati^ory— 
Landlords  and  royalty-takers  levy  a  billion  of  dollars  or  more  per  ysar  on  in- 
dustry— They  take  that  much  of  the  annual  product — It  does  not  justly  belong 
to  them,  must  therefore  belong  to  laborer  or  capitalist  or  both. 

"What  are  we  otherwise  here  than  guests f^ 

What  right  has  the  hmcUord,  then,  to  remuneration? 

Land,  in  the  broader  signification  of  the  term,  is  the 
free  gift  of  nature  to  all  her  children.  It  is  the  coal 
in  the  mine,  the  lead,  ir(jn,  gold  and  silver  in  the  ore, 
the  standing  forest,  the  fish  in  the  stream,  the  water 
to  run  our  mill-wheels  and  float  our  fleets,  the  firm 
earth  on  which  to  build,  the  air,  the  imperishable  qual- 
ities of  the  soil.  By  Ricardo  the  term  land  is  limited 
to  the  imperishable  qualities  of  the  soil,  and  this  in- 
terpreted ttj  include  streams  and  water  powers  is  the 
significance  in  which  I  shall  use  the  term..  It  is  for  land 
thus  limited,  or  rather  the  values  attaching  thereto, 
that  rent  proper  is  charged.  Ore,  coal,  limlier,  fish, 
etc.,  in  tiieir  original  places,  or  the  mines  containing 
them,  while  supplied  by  nature  are  not  land  in  the  sen.se 
that  fields  and  building  sites  and  roads  and  navigable 
rivers  are  land.  They  are  perishable,  limited  in  quan- 
tity,  and  are  consumed  by  use.  The  compensation 
charged  for  them  is  not  rent  proper,  and  does  not  follow 
the  laws  of  r(int.  To  secure  the  value  of  the  i)rodiicts  of 
mine  and  forest  io  the  whole  community,  will  lequire 
very  dilVcrent  remedies  from  those;  re([uired  for  imper- 
ishable? land. 

Land  is  tlie  undiminisliing  contributitju  of  nature  to 
the  needs  of  man.  It  is  given  value  by  the  uniltiludi- 
nous  improv<'m<'iit>-  find  adaptations  civili'/Mtiiiii  dcvel- 


3()  A  BKEED  OF  BARREN  METAL 

oped  upon  it  by  the  heads  and  hands  of  toil,  taken  in 
co]inection  with  the  fact  that  it  is  limited  in  quantity, 
requisite  as  a  basis  for  all  production,  and  attaches  to 
itself  the  utilities  of  a  portion  of  the  im])rovements 
uj^on  its  surface.  Mines  and  forests  are  natural  store- 
houses not  spontaneously  replenished  by  nature;  land, 
what  is  left  after  the  store  has  been  taken. 

It  will  bo  readily  admitted  that  what  one  produces  is 
primarily  his  own.  This  is  a  necessary  corollary  to  the 
equal  rights  of  all  to  life,  a  right  which  is  affirmed  by 
the  practice  of  all  civilized  communities.  It  follows, 
necessarily,  that  what  one  does  not  produce  is  not  prj- 
maril}^  liis  own.  These  propositions  are  the  basis  of  all 
property".  If  one  can  not  gain  a  property  right  by  pro- 
duction, there  is  no  way.  in  which  he  can  gain  such  a 
right.  And  everything  which  man  iises^  except  what 
nature  freely  gives,  is  produced  by  man.  One  can  gain 
title  to  what  he  has  not  produced  liy  a  free  gift  from 
the  producer,  or  by  trading  directly  or  indirectly  what 
one  has  produced  for  it.  A  title  to  what  one  has  not 
produced  can  come  only  through  him  who  has  produced 
it.  Applying  this  axiomatic  principle,  the  landlord 'has 
no  just  title  to  land,  no  greater  right  to  it  than  any 
other  citizen.  He  did  not  produce  it,  for  by  definition, 
it  is  the  free  gift  of  nature.  He  did  not  gain  title  to  it 
from  him  who  produced  it,  for  no  human  lieing  produced 
the  land,  and  nowhere  is  it  written  in  the  record  of  na- 
ture that  any  individual  shall  have  exclusive  title  deeds 
to  that  which  is  the  common  inheritance  of  all.  Even 
.the  community  can  give  no  greater  title  to  land  than 
they  themselves  hold,  and  this  is  but  usufruct  for  the 
passing  generation  only;  and  then  only  on  such  terms 
that  the  thousands  born  daily  into  the  world  shall  share 
the  gift  of  Jiature  as  well  as  those  already  here.  For 
these  new-comers  have  an  equal  right  to  live  with  those 
here  before  them,  and  none  can  live  exce])t  by  utilizing 
nature's  gifts.  Nature  has  no  laws  of  ^primogeniture. 
Her  bequests  are  to  all  the  generations  of  men. 

As  the  landlord  has  no  just  exclusive  right  to  the 
land,  he  has  no  right  to  charge  others  for  the  use  of  it, 
and  no  right  to  withhold  it  from  the  use  of  others.   He 


A  BREED  OF  BARREN  METAL  37 

may  have  a  right  in  usufruct  while  he  lives,  just  as  has 
every  other  individual,  but  this  is  onh^  to  what  he  can 
personally  use  to  ordinarily  good  advantage.  What  he 
does  personally  use  must  be  the  criterion  of  what  he  can 
use.  Rent  belongs  to  the  comliiunity  as  a  whole.  For 
upon  the  improvements  built  up  by  the  community  as 
a  whole  the  rental  value  of  land  depends.* 

The  fact  that  the  landlord's  collection  of  rent,  or  the 
owner's  natural  advantage,  his  royalty,  makes  the  farm 
no  more  productive,  puts  no  more  gold  or  iron  in  the 
ore,  no  more  coal  in  the  mine,  makes  the  site  no  better 
to  build  on,  the  river  no  more  navigable,  the  water  no 
richer  in  fish,  the  forest  no  more  extensive,  the  stream 
)io  more  powerful,  stamps  the  rent  and  royalty  charge 
as  a  tribute  levied  without  any  return.  These  charges 
ftre  founded  solely  on  cunning  dishonesty  and  force. 
They  have  not  the  shadow  of  an  ethical  sanction.  Rent- 
taking  by  landlords,  then,  is  not  only  grossly  unjust,  but 
is  in  no  way  necessary  to  production.  It  is  a  charge  on 
production  for  which  there  is  absolutely  no  return.  It 
can  then  be  well  dispensed  with.  By  all  the  canons 
of  business,  when  one  is  making  retrenchments  the  first 
expenses  to  attack  are  those  which  are  unnecessary. 
But  these  are  wcn'se.  They  are  absolutely  inimical  to 
the  best  results  in  production.  Land  is  the  basis  of  all 
production,  and  tl^e  practice  of  allowing  the  landlord 
to  collect  rent  on  land  has  led  to  a  monopolization  of 
the  earth  which  deprives  vast  numbers  of  willing  pro- 
ducers of  an  indispensal)le  instrument  of  industry. 

What  is  true  of  tiie  landlord  in  this  respect  is  true  of 
the  exacter  of  royalties  also.  Hcsidns  giving  absolutely 
no  return,  he  discourages  and  crii)])l('s  industry. 

According  to  a  bulletin  of  the  census  of  1896  the  real 
(•stat*!  (jf  th(!  country,  lands  and  improvements,  was 
worlli  in  that  year  thirty-nine  and  , one-half  billions  in 
round  numbers  This  w(jiild  place  the  value  of  bare 
land  at  something  less  than  twenty  l)illions.  Rents  are 
n.)t  m')re  than  five  \v'r  cent  of  this  sum,  giving  a  yearly 
aggregate  of  one   billion    paid   1o  the   landlords  of  tiic 

*Tli.il  tliis  proposition  doua  not  express  ilio  wlioli  iriitli  will  \n  sluiun  In  rcnfte-. 


38920^ 


38  A  brp:ed  of  barren  metal 

country.  Profits  on  land  held  speculatively  must  be 
added  to  this,  swelling  the  aggregate  very  materially. 

It  is  impossible  accurately  to  estimate  royalties  from 
forests  and  mines,  but  they  aggregate  hundreds  of  mil- 
lions. * 

We  have  then  considerably  more  than  a  billion  dol- 
lars per  year  exacted  from  industry  without  a  shadow 
of  right  or  a  pretense  of  valuable  return.  Neither  the 
landlord  nor  the  appropriator  of  Others  of  nature's 
gifts  has  any  claim  to  it  in  justice.  It  must  belong 
to  either  the  capitalist  or  the  laborer.  Let  us  inquire 
which  of  these  classes  have  the  better  right  to  the  money 
now  paid  in  rent  and  royalties.  In  doing  this  we  Avill 
also  put  the  test  of  ethics  to  the  share  Avhich  now  goes 
to  the  capitalist. 

The  single  tax  proposed  by  Henry  George  and  his 
followers,  if  capable  of  application, would  greatly  miti- 
gate, if  it  would  not  destroy  the  evil  of  private  appro- 
priation of  rents.  It  is  probable  that  nothing  short  of 
state  ownershipof  mines  and  close  state  ccuitrol  of  for- 
ests can  ever  give  royalties  to  the  community,  the  only 
just  owner.  It  looks  to  me  as  though  a  tax  on  mining 
land  would  scarcely  meet  the  requirement,  for  the  tax 
must  be  levied  in  accordance  with  the  output,  especially 
if  it  were  intended  to  take  the  whole  royalty  charge, and 
then  it  would  become  a  tax  on  the  pi^duct  capable  of  be- 
ing readily  shifted  upon  the  consumer.  But  more  of 
this  hereafter.  In  fact, there  is  no  such  thing, economic-v 
ally  speaking,  as  mining  land.  We  have  no  soil  capable 
of  reproducing  minerals,  even  by  the  application  of  any 
amount  of  labor. 


CHAPTER  VII. 

Terms — The  necessity  for  an  exact  use  of  words — Wealth,  capitalist  and  laborer 
defined — Interest  and  capital — Profits — No  necessity  for  distinguishing  between 
them  in  this  inquiry — Arguments  based  on  an  ambiguous  use  of  terms — Capital 
held  to  be  labor  —The  use  of  terms  in  their  ordinary  signification  not  so  neces- 
sary as  cheir  use  in  the  same  signification  in  the  same  discourse — Is  capital 
stored  labor? — The  fallacies  based  on  this  erroneous  conclusion — A  jugglery  of 
terms — Neither  capital  nor  labor  hat  rights — Rights  belong  to  persons,  not 
things— The  basis  of  the  capitalist's  claim  for  remuneration — The  basis  of  the 
laborer's  claim. 

Amhiguity  is  the  stumhling-hlock  of  logic. 

At  this  point  it  is  necessary  that  terms  be  clearly  de- 
fined, for  from  the  use  of  ambiguous  terms  arises  nine- 
tenths  of  the  ordinary  confusion  of  thought.  Capital 
is  wealth  used  in  production.  Wealth  is  anything  hav- 
ing value  in  exchange;  i.  e.,  capable  of  commanding  a 
price.  Buildings,  all  improvements  on  land  and  all 
movables  are  included  in  the  term  "wealth."  The  capi- 
talist is  he  who  controls  wealth,  and  from  that  fact, 
apart  from  any  individual  services,  claims  a  remunera- 
tion for  allowing  his  wealth  to  be  used.  This  remunera- 
tion is  called  interest  or  capital  profits,  depending  on 
whether  the  wealth  is  loaned  to  another  or  managed  by 
another  under  the  direct  control  of  the  owner.  In  this 
inquiry  it  is  unnecessary  to  distinguish  between  interest 
and  ca))ital-profits,  for  both  are  returns  for  the  use  of 
wealth,  and  not  for  the  individual  services  of  the  cap- 
italist. It  is  the  capitalist,  and  not  capital,  who  receives 
these  returns;  and  it  is  the  laborer,  and  not  labor,  who 
produces  wealth  and  receives  wages.  We  are  inquiring 
into  the  rights  of  the  laborer  and  the  capitalist  as  such, 
and  not  into  the  rights  of  labor  and  capital,  for  the  lat- 
ter terms  r<'present  things  w'ithout  any  rights  whatever. 
I  here  usf  the  term  laborer  in  the  sense  in  which  I  have 
used  it  before  in  these  pages;  he  w-ho  uses  his  brain  or 
hand  in  adding  to  the  sum  total  of  human  assets,  ex- 
cluding him  who  uses  his  ])o\vers  to  appropriate  what  has 
already  bef;n  jn'oduced. 


40  A  nKEED  OF  BARREN  METAL 

These  distinctions  may  appear  pedantic,  but  they  are 
absolutely  necessary  to  meet  a  school  of  apologists  who 
are  e>ither  so  mentally  confused  or  so  sophistical,  that 
they  readily  accept  conclusions  based  on  using  terms  in 
dili'erent,  meanings  in  different  portions  of  a  discourse. 
Some  of  them  go'so  far  as  to  claim  a  remuneration  for 
capital  on  the  ground  that  it  is  labor. 

It  matters  not  so  much  whether  terms  are  used  strictly 
in  their  ordinary  meaning,  if  the  same  meaning  is  at- 
tached to  them  in  all  portions  of  the  same  discussion. 
To  show  the  vital  necessity  for  a  precise  use  of  terms,  I 
will  notice  briefly  certain  arguments  based  on  an  ambi- 
guity of  words  and  thus  clear  the  way  for  subsequent 
discussion. 

Capital  is  stored  labor,  say  the  apologists,  and  from 
this  premise  they  go  on  to  argue  that  since  it  is  stored 
labor  and  was  produced  by  labor,  it  has  the  rights  of  the 
laborer.  There  are  several  fallacies  buried  in  this  nebu- 
lous maze  of  hazy  cogitation. 

It  does  not  follow  that  because  a  thing  was  produced 
by  labor  it  is  labor.  In  fact,  that  is  the  best  argument 
that  it  is  not.  A  force  and  the  result  of  a  force  are 
quite  different  concepts.  You  may  as  well  say  that  a 
spade  is  a  man's  ingenuity  because  a  man's  ingenuity 
produced  it,  as  to  assert  that  the  result  of  labor  is  labor 
because  it  is  the  result  of  labor.  The  wealth  resulting 
from  labor,  or  the  stored  labor,  as  it  is  termed,  can  no 
more  produce  what  labor  can,  than  the  spade  can  pro- 
duce another  spade.  The  reason  in  both  cases  is  iden- 
tical. The  spade,  though  produced  by  man's  ingenuity, 
is  not  man's  ingenuity;  and  wealth,  although  the  result 
of  labor,  is  not  labor.  Wealth  and  labor  have  no  more 
in  common  than  a  man's  ingenuity  and  a  spade.  Wealth 
is  an  inanimate,  decaying  thing,  labor  a  living  force. 

The  confounding  of  cause  and  effect  which  pronounces 
wealth  used  as  capital  essentially  the  same  as  labor,  is 
so  utterly  absurd  that  it  would  not  be  worthy  of  notice 
were  it  not  for  the  fact  ihat  acute  thinkers  in  other 
fields  cling  to  this  fallacy. 

But  these  apologists  go  a  step  further  in  their  argu- 
ment.    They  say  that  the  resuU  of  labor   is   labor,  but 


A  BREED  OF  BARREN  METAL  41 

the  result  of  labor  is  also  capital.  Capital  is  therefore 
labor  and  hence  has  the  rights  of  labor.  Labor  produces 
all  wealth,  hence  the  labor  which  is  the  result  of  labor, 
and  is  at  the  same  time  capital,  is  entitled  to  the  share 
which  it  produces.  Thus  playing  on  different  meanings 
of  the  terms  labor  and  capital,  and  using  these  rigidly 
distinct  concepts  as  interchangeable,  these  muddle- 
brained  philosophers  prove  to  their  own  satisfaction 
that  capital  is  productive,  and  hence  entitled  to  a  por- 
tion of  that  which  is  produced  by  the  laborer. 

This  is  exactly  the  same  sort  of  logic  by  which  the 
tyro  in  that  science  conclusively  proves  that  a  cat  has 
ten  tails  or  that  one  cent  is  better  than  heaven.  It  is 
labeled  by  logicians,  the  fallacy  of  ambiguous  middle. 

It  is  scarcely  necessary  to  point  out  to  the  man  of 
common  sense  that  what  the  laborer  produces  is  not 
labor,  no  more  than  the  spade  is  a  man's  ingenuity,  or 
the  bedstead  which  he  produces  is  the  cabinet  maker. 
If  you  apply  the  terra  labor  to  these  results  of  the  toil 
of  the  laborer,  you  mean  something  altogether  differ- 
ent from  what  you  mean  by  the  term  labor  used  in  the 
sense  of  the  productive  activity  exerted  by  the  laborer. 
What  is  true  of  the  latter  is  not  in  any  sense  true  of  the 
former.  If  you  change  the  term  to  stored  labor  and 
then  to  capital  and  then  substitute  the  latter  term  for 
labor  where  it  occurs,  you  are  simply  juggling  with 
terms,  and  the  results  obtained  mean  absolutely  noth- 
ing. Your  action  would  be  the  same  as  though  you 
solved  a  problem  in  mathematics  by  letting  "X"  rep- 
resent thirty  in  one  portion  of  the  process  and  one 
thousand  in  another  and  substituting  these  different 
"X's"  for  each  other — as  though  they  were  the  same.* 

If  these  philosophers  had  not  made  this  mistake  in 
the  indiscriminate  use  of  hilior  and  capital,  there  would 
be  another  fatal  difhculty  with  their  argument.  How- 
f'ver,  much  the  same  fallacy  would  be  involved.  Neither 
capital  nor  labor  has  any  rights  whatever.  They  are 
simple  things,  with  no  more  rights  than  a  doorpost  or 
a  front  fence.     This  is  especially  true  of  capital,  which 

•There  can  certainly  be  no  fault  found  with  using  words  figuratively  in  dis- 
course, but  it  is  an  unpardonable  fallacy  lo.-irKuc  from  hotli  real  and  tiRurative 
meanings  in  the  same  discourse. 


4l^  A  BREED  OF  BARREN    METAL 

is  nothing  more  than  wealth  intended  for  a  certain  pur- 
pose. Labor  is  a  thing  when  used  as  a  general  term, 
l3ut  cannot  be  separated  from  the  laborer.  The  rights 
belong  to  the  laborer  and  the  capitalist,  and  this  brings 
us  again  to  the  original  proposition  lying  at  the  fouii- 
dation  of  all  property  rights.  Man  has  a  primary  rigl.i 
to  wliat  he  produces,  and  hence  has  not  a  primary  right 
to  what  any  one  else  produces. 

The  capitalist  bases  his  claim  to  what  is  produced  on 
the  claim  that  his  wealth  produced  it.  The  laborer 
bases  his  claim  to  what  is  produced  on  the  ground  that 
his  labor  produced  it.  This  must  necessarily  be  the 
basis  of  the  claim  of  each,  otherwise  our  first  proposi- 
tion would  be  wrong. 

The  capitalist,  as  such,  certainly  does  not  directly  aid 
in  the  production  of  anything;  for  as  a  capitalist  he  toils 
not  in  production.  As  he  has  no  title  to  what  the  la- 
borer produces  and  can  acquire  none  through  his  wealth, 
he  has,  as  a  capitalist,  no  title  to  anything  produced, 
unless  his  wealth  is  capable  of  producing  it.  The  whole 
question  of  the  right  of  the  capitalist  as  such  to  interest 
or  capital  profits,  to  any  form  of  remuneration  what- 
ever, for  allowing  his  wealth  to  be  used,  depends  on 
whether  wealth  is  of  itself  productive.  It  is  a  question 
of  fact,  purely,  capable  of  being  established  by  evidence. 
Let  us  put  human  experience  on  the  stand  and  ascer- 
tain the  truth. 

The  idea  that  the  mere  possession  of  wealth,  regard- 
less of  whether  that  wealth  be  capable  of  production,, 
gives  a  right  to  a  portion  of  the  product  of  industry' 
is  an  obvious  absurdity.  The  capitalist  has  not  as  a 
man  a  right  to  what  the  laborer  produces.  If  he  has 
any  greater  rights  as  a  capitalist  than  as  a  man  he  must 
have  gotten  those  rights  from  his  wealth,  for  the  imp- 
session  of  wealth  is  the  only  difference  between  tlie 
capitalist,  as  a  capitalist,  and  the  capitalist  as  a  man. 
If  he  got  from  wealth  the  riglit  to  appropriate  to  his 
own  use  the  wealth  produced  by  the  laborer,  thewealtli 
of  the  capitalist  must  have  had  that  right.  This  would 
be  asserting  that  wealth,  an  inanimate  thing,  had 
greater  rights  than  either  the  capitalist  or  the  laborer, 


A  BREED  OF  BARREN  METAL  48 

which  is  manifestly  absurd.  Unless  wealth  is  essentially 
productive,  the  capitalist,  as  a  capitalist,  has  no  right 
to  any  remuneration  whatever.  Is  wealth  essentially 
productive? 


CHAPTER   VIII. 

Is  Wealth  Essentially  Productive — The  observed  essential  principle  of 
decay  in  all  wealth — Specific  instances — The  pyramids — Rome — A  dynasty  of 
kings — Articles  of  common  use — The  life  of  a  machine — Without  the  exertion 
of  the  laborer  the  country  would  turn  into  a  wilderness— What  we  eat  and  drink 
and  wear — We  live  from  hand  to  mouth — The  independence  of  the  capitalist- 
Labor  alone  the  preserver  of  wealth — No  exception  to  the  rule  of  decay  in 
wealth — Interest-taking  must  be  founded  on  the  assumption  of  the  spontaneous 
growth  of  wealth— The  absurdity  of  the  assumption. 

"TAe  proudest  work  of  man  as  certainly,  but  slower, 
Must  pass  like  the  grass  ^neath  the  sharp  scythe  of  the 
mower.''' 

Is  wealth  essentially  productive? 

Every  article  of  wealth  produced  by  man  has  within 
it  the  essential  principle  of  decay  and  final  complete 
destruction.  Nature  lends  it  to  him  but  for  a  time; 
after  a  time  she  reclaims  it  as  her  own.  The  condition 
of  the  loan  is  constant  use.  Man  must  produce  unceas- 
ingly to  keep  his  stock  of  wealth  intact.  There  are  no 
exceptions  to  the  rule.  The  more  indispensable  an  arti- 
cle to  humanity,  the  moreprompt  and  certain  its  decay. 

The  most  stable  of  man's  works  are  the  least  useful. 
The  vast  pyramids  of  Egypt,  useless  monuments  to  the 
superstition  and  misguided  ingenuity  of  a  race  of  slaves, 
seem,  at  first  glance,  eternal;  but,  although  their  exist- 
ence has  covered  but  a  point  in  the  existence  of  short- 
lived man,  the  hand  of  time  is  already  grinding  them 
to  the  dust.  Eternal  Rome  is  in  ruins;  the  palaces  of 
the  Caesars  have  crumbled  to  decay.  More  terrible 
than  the  Goths  and  Vandals  has  been  the  edict  of  Na- 
ture reclaiming  her  own  from  the  evanescent  imprint 
of  the  feeble  hand  of  man.  Palmyra  and  Thebes  are 
but  half  forgotten  names;  Babylon,  but  a  symbol  of 
iniquity.  Scarcely  less  perishable  than  man  himself 
are  the  works   of  his  hands.     Remove  the    preserving 

44 


A  BREED  OF  BARREN  METAL  45 

care  of  the  laborer  from  man-made  wealth,  and  its  de- 
struction is  but  a  question  of  days. 

So  true  is  this  that  we  might  conceive  of  a  great 
dynasty  of  kings  owning  the  earth  and  all  of  its  bright 
cities  and  all  of  its  teeming  wealth;  yet,  if  no  toiler's 
hand  were  raised  to  save,  the  scions  of  that  dynasty 
would  starve  as  they  watched  their  fair  cities  crumble, 
and  the  earth  become  a  wilderness.  Even  after  a  quarter 
of  a  century,  there  would  not  be  a  king  left  to  tell  the 
tale. 

If  we  turn  our  attention  to  articles  of  common  use, 
w^e  find  them  more  perishable  still.  The  staunchest 
ship  will  scarcely  brave  the  storms  of  half  a  century. 
Place  her  idle  and  unattended  in  the  docks  and  she  will 
rot  in  a  decade.  The  locomotive  with  its  frame  of  steel 
and  its  coat  of  imperishaljle  brass,  if  active,  willscarcely 
outlive  the  youth  of  the  hand  that  fashioned  it;  idle- 
ness will  not  extend  its  career.  The  average  useful  life 
of  a  machine  is  estimated  at  twenty-two  years,  and  the 
rust  of  idleness*  will  destroy  k.  more  quickly  than  the 
wear  of  work.  What  would  become  of  our  electric  sys- 
tems, the  metallic  nerves  of  mother  earth,  if  abandoned 
to  the  destructive  powers  of  nature  for  even  ten  years? 
We  could  scarcely  determine  that  they  had  ever  been. 
If  abandoned  for  a  quarter  of  a  century,  the  continent 
woukl  turn  into  a  wilderness  scarcely  less  desolate  than 
wlien  C(jluml)us  landed  here.  Our  roads  and  streets  and 
wharfs  and  sliops,  if  loft  to  themselves,  would  scarcely 
survive  the  hands  that  built  them.  Rats  would  gnaw 
where  silk-robed  judges  sit,  and  serpents  hiss  where  so- 
cial revelry  now  resounds. 

Consider  the  things  most  necessary  to  man;  that 
which  he  eats  and  drinks  and  that  with  which  he 
clothes  himself.  Let  the  lab(jrer  drop  his  hands,  aban- 
don elevators,  cribs,  storehouses,  stables  and  herds  to 
the  worm,  rat  and  weevil,  to  the  inclement  elements 
and  the  d(;serted  fields,  and  huuianity  would  be  starv- 
ing within  a  year.  The  earth  would  be  a  savage-pop- 
ulated wilderness  within  ten  years  In  the  matter  of 
food  and  cbjlhing.  humanity  liti.'i'ally  lives  frnin  hand 
to  mouth. 


46  A  BREED  OF  BARREN  METAL 

Why  then  this  idle  boast  of  the  power  and  independ- 
ence, of  the  productiveness  of  capital?  Why  fly  in  the 
face  of  facts  and  affirm  that  the  capitalist  can  alford  to 
rest  and  feed  on  what  he  has?  If  young  Gould,  the 
inheritor  of  his  father's  millions,  refused,  for  a  single 
month,  to  work  with  his  hands,  and  others  refused  to 
labor  for  him,  he  would  be  in  a  worse  condition  at  the 
end  of  that  time  than  the  meanest  denizen  of  White- 
chapel.  If  laborers  deserted  him  to-day,  not  all  the 
efforts  of  his  puny  hands  could  save  even  a  wreck  of 
his  mighty  fortune  from  the  destroying  hand  of  nature. 
He  would  be  poor  as  a  savage  before  he  had  time  to 
turn  gray, 

Man-created  wealth  is  not  productive.  The  principle 
within  it  is  decay,  not  growth.  And  bonds  cannot  save 
it,  the  edicts  of  capitalists  can  not  save  it — it  is  labor 
with  the  head  and  hands,  and  that  alone  which  must 
and  does  preserve  it.  Humanity  lives  on  man-created 
wealth.  The  imprint  of  the  laborer's  hand  must  be 
placed  upon  the  treasures  of  Mother  Ea'rth  before  they 
become  current  in  nature's  great  banking  house.  There 
are  no  exceptions  to  the  rule. 

The  above  are  but  a  few  examples  of  the  inherent 
decay  essentially  embodied  in  all  wealth,  but  the  prin- 
ciple needs  no  other  proof  than  experience  common  to 
all.  Not  a  single  instance  can  be  cited  of  the  sponta- 
neous increase  of  man-created  wealth;  not  a  single  in- 
stance, of  aught  except  man-created  wealth  supplying 
the  wants  of  man.  The  decaying  quality  of  wealth  is 
self-evident  when  thought  upon. 

But  what  is  the  assumption  of  the  capitalist?  How 
does  he  justify  interest-taking?  As  we  have  seen,  in- 
terest or  capital  profits  are  not  a  remuneration  for  the 
toil  of  the  capitalist,  for  the  capitalist  as  such  toils  not. 
As  we  have  also  seen,  he  has  no  claim  on  that  which 
is  produced  by  another,  for  that  would  be  denying  the 
right  of  every  man  to  what  he  produces  by  his  toil,  and 
would  overthrow  all  right  of  property.  Then  he  de- 
pends for  his  interest  and  profits  on  the  assumed  power 
of  wealth  to  produce  more  wealth.  He  must  justify 
the  taking  of  a   return  more  than  the  cajjital  lent  on 


A  BREED  OF  BARREN  METAL  47 

the  assumption  that  the  wealth  lent  increased  of  itself, 
for  if  it  was  another's  toil  which  increased  it,  in  taking 
the  excess  he  would  be  taking  what  another  produced, 
and  therefore,  what  belongs  to  another. 

But  we  have  seen  that  the  assumption  that  wealth 
has  within  it  the  power  of  increase  is  contrary  to  the 
facts  in  the  case.  That,  without  exception,  the  inher- 
ent principle  in  wealth  is  decay,  not  growth. 

The  practice  of  interest-taking  flies  in  the  face  of 
facts  and  asserts  the  producingpower  of  unaided  wealth 
at  every  turn.  This  assumption,  if  carried  to  its  logical 
conclusion,  would  lead  to  very  strange  results.  If  in- 
terest-taking is  right,  compound  interest-taking  is  right. 
The  principle  of  compound  interest  is,  that  a  dollar,  or 
the  wealth  represented  by  it,  without  any  exertion  on 
the  owner's  part  will  grow  into  two  dollars  in  a  given 
number  of  years,  four  dollars  in  twice  that  period, 
eight  dollars  in  three  times  the  original  period,  and 
that  it  will  keep  on  increasing  in  a  geometrical  ratio 
until  that  one  dollar,  with  its  interest,  would,  in  time, 
represent  all  of  the  wealth  on  the  earth.  The  rate  makes 
uo  difference  as  to  the  principle  of  the  thing.  Money 
at  compound  interest  will  increase  indefinitely  at  five 
as  well  as  at  twenty-five  per  cent,  though  more  slowly, 
to  be  sure. 

It  does  not  require  a  philosopher  to  see  the  absurdity 
of  a  principle  deduced  ircnn  the  power  of  wealth  un- 
aided to  increase  indefinitely,  yet  our  whole  financial 
system  is  based  on  this  very  absurdity.  And  what  makes 
matters  worse,  it  is  not  one  dollar  that  is  assumed  i.o 
have  the  power  of  indefinifdy  increasing,  Init  several 
billions  of  (hdlars. 

A  syndicate  of  less  than  one  hundred  American  cap- 
italists, if  allowed  to  collect  interest  on  their  capital 
at  a  low  rate  and  re-invest  for  150  years  or  less,  would 
at  the  end  of  that  time  own  the  earth  and  all  real  and 
personal  property  thereon.  This  is  a  sin)i)le  mathemat- 
ical proposition,  capable  of  exact  demonstration,  and 
any  one  who  doubts  the  truth  of  this  statement  nniy 
set  all  doubls  at  rest  by  com])uting  compound  interest 
on  one  and  one-halt"  billions  ol'  dollars  Cor  one  hundred 


48  A  BREED  OF  BARREN  METAL 

and  fifty  years,  at  five  per  cent  per  annum.  Great  cor- 
porations tend  at  present  to  extend  their  investments 
and  to  decrease  the  number  of  their  important  share- 
holders. Corporations  live  for  centuries.  A  corpora- 
tion coming  to  practically  own  the  earth  under  the  laws 
of  interest,  is  not  only  not  impossible,  but  not  improb- 
able. We  have  already  instances  of  corporations  hold- 
ing controlling  interests  in  towns  and  cities  and  states. 
One  two-hundred-and-fiftieth  of  the  population  have, 
under  such  methods,  come  to  own  eighty  percent  of  the 
wealth  of  the  country.  Figures  deduced  from  the  census 
have  been  so  averaged  and  manipulated  by  writers  as 
to  make  it  appear  that  nine  per  cent  of  the  people  of 
the  nation  owned  in  1890  but  about  seventy-one  per  cent 
of  the  wealth, but  an  analysis  of  the  figures  will  bear  out 
my  statement.  Either  is  startling  enough.  The  only 
difficulty  in  the  way  of  a  private  corporati(m  monopo- 
lizing all  wealth,  seems  to  he  in  getting  an  organization 
large  enough,  and  we  are  rapidly  overcoming  that  diffi- 
culty. Will  an}^  thoughtful  man  knowingly  support  a 
])rinciplo  which  might  give  to  one  hundred  irresponsi- 
h]e  brigands  all  the  wealth  of  the  earth,  to  the  exclusion 
of  the  other  billion  and  a  half  of  humans?  The  prin- 
ciple of  interest-taking  will  do  this.  Its  philosophy 
is  the  acme  of  absurdity,  yet  all  men  seem  to  acquiesce 
in  the  practice. 

The  more  wealth  is  saved,  the  more  there  is  to  bear 
interest.  Hence,  burdens  forever  increase.  The  wealth 
of  the  world  is  an  inverted  pyramid,  the  misplaced  base 
of- which  becomes  more  unwieldy  day  by  day.  The 
interest-bearing  wealth  increases  in  a  ratio  which  is 
ever  growing  more  and  more  rapid.  It  is  a  very  well 
established  fact,  or  rather  law  of  economics,  that  the 
power  of  producing  wealth  decreases  in  reference  to  the 
labor  expended,  after  a  certain  limit  is  reached.  This 
law  applies  to  the  bulk  of  wealth.  It  is  called  the  law 
of  diminishing  returns. 

To  be  more  specific:  After  a  certain  fixed  limit  has 
been  reached,  the  return  which  land  yields  to  the  appli- 
cation of  additional  labor,  is  comparatively  less.  All 
wealth  is  produced  by  the  application  of  labor  to  land. 


A  BREED  OF  BARREN  METAL  49 

We  have,  then,  under  the  haw  of  interest,  liabilities 
more  and  more  rapidly  increasing  and  assets  growing 
proportionately  less.  The  inverted  pyramid  becomes 
more  and  more  unstable.  No  thinker  worthy  of  the 
name  can  uphold  a  law  which  implies  a  flat  contradic- 
tion of  the  precepts  of  nature,  and  whose  logical  conse- 
quence is  to  keep  the  world  forever  tottering  on  the 
bi'ink  of  bankruptcy. 

Wealth  cannot  be  produced  with  sufficient  rapidity 
to  keep  pace  with  the  demands  of  interest.  The  loaned 
capital  must  necessarily  absorb  all  of  the  wealth  and 
the  mone}'  lender  become  possessed  of  all  of  the  prop- 
erty on  earth.  Land,  is  subject  to  private  ownership 
and  may  also  become  the  property  of  the  money  lender. 
The  laborer  then  will  be  absolutely  at  the  mercy  of  the 
capitalist.  Deprived  of  land  in  his  own  right,  he  must 
use  the  land  of  another.  Deprived  of  capital  in  his 
own  right,  he  must  use  the  wealth  of  another.  All  that 
he  produces,  more  than  is  barely  sufficient  to  keep  him 
alive,  must  go  to  the  capitalist  in  interest,  and  to  the 
landlord  in  rents.  He  must  take  the  terms  offered  him 
and  live  on  what  he  is  allowed  by  his  masters.  If  these 
masters  do  not  wisli  him  to  live  at  all,  all  that  is  left 
to  him  is  to  break  the  law  or  die.  The  undertaking  Inis- 
iness  man  must  use  the  wealth  and  land  (jf  the  capital- 
ist and  landlord,  or  collect  rent  and  interest  for  his 
own,  in  addition  to  remuneration  for  his  toil.  He  also 
i.s  accustomed  to  set  apart  a  percentage  for  profits.  If 
any  cajntal  used  in  business  collects  interest,  all  cap- 
ital used  in  business  must  tend  to  collect  interest.  For 
if  a  busin(;ss  man  could  command  as  large  an  income 
by  loaning  his  capital  and  avoiding  tlu^  risks  of  l)us- 
iness,  as  Ik^  c(nil<l  Ijv  engaging  in  active  business,  he 
would  lend  his  capital  and  leave  active  business  alone. 
His  ol)jpf't  in  Ix'coiniiig  an  active  business  man,  is  to 
gain  both  profit  and  interest,  often  in  addition  to  wages 
for  iiis  toil.  His  venture  fails  of  his  object  if  he  does 
not  succeed  in  gaining  both.  This  will  sustain  my  large 
estimate  of  interest-l)earing  wealth. 

If  tlie  business  man  em])loys  laljorers,  those  laborers 
ai''-  oliligcd  to  i»roduce  the  wfalth  which  is  given  in  in- 


50  A  BREED  OF  BARREN  METAL 

terest.  If  he  be  simply  a  laborer,  employing  his  own 
capital,  as  are  so  many  small  farmers  and  tradesmen, 
he  must  make  his  labor  produce  interest  and  wages  or, 
in  comparison  with  the  moneylender,  lose  either  time 
or  interest.  Only  cajjital  allowed  to  lie  idle  or  which 
is  dissipated  in  unfruitful  undertakings,  fails  to  exact 
interest,  and  the  latter  is  totally  lost,  while  the  former 
is  a  charge  on  the  whole  community. 

All  our  energies  are  bent  toward  applying  the  prin- 
ciple of  interest.  We  undertake  to  pay  increase  on  an 
enormous  sum.  According  to  the  United  States  Census 
of  1890,  the  wealth  of  the  United  States,  on  a  gold  basis, 
was  over  sixty-five  billions.  Allowing  for  gold  appre- 
ciation, it  vrould  foot  up  something  likeeighty-fivo  bil- 
lions, and  wc  attempt  to  pay  interest  and  rent  on  more 
than  one-half  of  this  enormous  sum.  If  ijiterest  on  a 
billion  and  one-half  would  in  a  little  more  than  a  cen- 
tury absorb  all  the  wealth  on  earth,  what  will  be  the 
consequences  of  trying  to  pay  interest  and  rent  charges 
(in  thirty  times  that  sum?  This  is  why  the  interest 
question  has  become  one  of  vital  importance.  It  is  the 
great  question  of  the  day. 


CHAPTER  IX. 

The  Productive  Power  of  Wealth — Instances  and  objections — Is  capital 
productive? — How  it  differs  from  wealth— The  productive  power  of  a  machine 
— Interest  not  a  charge  for  a  machine's  effectiveness — Interest  a  charge  foruse 
of  wealth — Is  the  borrower  alone  benefited  by  that  use? — Men  should  be  paid 
for  what  they  relinquish,  not  for  what  they  can  extort— A  scientiiic  test  of  the 
productive  power  of  wealth — HoWwe  determine  the  cause  of  steam — The  ver- 
dict against  the  productivity  of  wealth — Wealth  an  advantage  to  the  laborer, 
but  that  is  not  the  question — The  toiler  is  heir  to  all  the  ages,  has  a  right  to  the 
use  of  ideas  of  inventors  applied  through  wealth — Unfinished  product— Other 
instances  of  decay  not  growth  in    wealth — The   house— The  mill — The   horses. 

"Wealth  cannot  produce,  but  capital  can,"  wisely 
remarks  the  apologist.  "Wealth  used  in  production  is 
productive.  Does  not  the  locomotive  do  more  than  a 
thousand  men?"  Even  if  that  were  true,  it  would  in 
no  way  affect  my  argument,  for  there  is  but  one  class 
in  the  world  which  can  convert  wealth  into  capital. 
That  class  is  made  up  of  those  who  toil.  While  wealth 
remains  in  the  hands  of  the  capitalist,  it  is  simply 
wealth.  When  he  lends  it  it  is  wealth,  and  he  claims 
interest  for  it  whether  it  is  scattered  to  the  four  winds 
of  heaven  or  used  in  productive  business.  It  is  only 
when  the  life  throb  of  the  laliorer  pulsates  through  the 
decaying  form  of  wealth  that  it  is  animated  into  capital. 
It  is  this  life-throb  which  wrings  additional  wealth 
from  reluctant  nature.  If  capital  is  productive  and 
wealth  is  jiot,  then  the  laborer  alone  can  make  wealth 
capital,  can  make  it  ]n*oductive,  and  ho  alone  would  be 
entitled  to  the  resulting  product 

But  capital  is  not  productive.  It  is  wealth  and  noth- 
ing more,  halving  no  inherent  quality  ditilerciit  from 
other  wealth.  It  is  known  by  a  different  name  because 
it  is  being  used  by  a  productive  toiler.  It  is  a  t(V)l  in 
the  hands  of  the  laborer,  a  tool  which  rusts  and  rots 
and  wears  out  just  like  other  tools.  As  a  tool,  the  la- 
borer uses  it  to  make  his  labor  mon^  (vllV^ctive,  but  the 
productive  ])(»w<'r    is  in  the  lali'in-r  and  not  in  the  tool. 

.".1 


52  A  BREED  OF  BARREN  METAL 

Human  energy  aided  l)y  human  intelligence  is  the  only 
force  yet  discovered  which  can  fashion  nature's  product 
into  forms  which  supply  the  wants  of  man.  However 
far  removed  from  the  result  produced,  it  is  human  in- 
telligence which  produces  the  result.  Just  as  the  elec- 
tric current  and  not  the  wire  which  transmits  it  moves 
the  needle  thousands  of  miles  away,  so  the  energy  of 
the  laborer,  through  the  lifeless,  decaying  tool,  shapes 
the  raw  material,  the  gift  of  nature,  into  forms  to  sat- 
isfy the  wants  of  man.  Capital  is  at  best  but  a  medium 
for  applying  human  energy  to  production,  not  a  pro- 
ductive element.  You  may  as  well  say  that  it  was  the 
pencil  and  paper  Avhich  produced  the  poem,  or  the  spade 
which  dug  the  potatoes  from  the  ground,  as  that  capi- 
tal produced  this  or  that  quantity  of  wealth.  The  glow- 
ing spark  of  human  energy,  whether  of  brain  or  hand, 
is  the  sole  productive  spark  outside  of  nature's  forces. 

This  truth  is  easily  verified.  A  machine  is  one  of  the 
most  important  forms  of  capital.  The  machine  is  made 
up  of  three  elements:  perishable  wealth,  the  idea  of  the 
inventor  and  the  labor  energy  of  the  toiler.  The  pro- 
ductive element  in  the  machine,  as  a  machine,  is  the 
idea  of  the  inventor  applied  by  the  energy  of  the  laborer. 
The  wealth  is  the  same  dead,  decaying  thing,  incapable 
of  even  preserving  itself.  The  locomotive  is  capable  of 
doing  what  a  thousand  men  could  not  do  without  a  lo- 
comotive. Is  it  the  wealth  in  the  locomotive  which 
does  the  work?  Not  at  all,  it  is  no  more  potent  than  a 
pile  of  old  iron.  The  inventor's  idea,  which  planned  the 
way  in  which  this  wealth  may  be  fashioned  to  be  used 
as  an  instrument,  and  the  mechanic's  skill  which  car- 
ried out  the  inventor's  idea,  and  guided  the  wealth'  in 
the  application  of  that  idea,  are  the  creative  elements. 
Without  both,  the  locomotive  would  be  a  mass  of  dead 
wealth  and  no  more. 

The  capitalist,  as  such,  is  not  an  inventor;  he  toils 
not  with  hand  nor  brain  to  add  to  the  wealth  of  the 
Avorld.  He  is  not  a  laborer.  Then  the  capitalist  who 
owns  the  locomotive  can  claim  a  remuneration  for  its 
use,  when  lent  to  another,  only  from  the  fact  that  it  is 
wealth  and  not  because  it  is  a  machine.     He  cannot 


A  BREED  OF  BARREN  METAL  53 

claim  it  on  that  account,  for  wealth  is  not  productive, 
but  is  a  charge  on  those  who  use  it.  Indeed  the  capi- 
talist does  not  lend  the  locomotive  or  any  other  ma- 
chine, as  a  machine,  but  as  a  specific  amount  of  wealth. 
Unless  he  had  an  absolute  monopoly  on  locomotives, 
the  price  whicli  he  could  charge  for  one,  or  its  value  as 
interest-bearing  capital  would  not  depend  upon  its 
effectiveness  as  an  implement  of  production,  but  upon 
the  cost  of  its  (?onstruction.  For  unless  monopolized, 
the  amount  of  wealth  consumed  in  its  construction 
would  command  such  a  machine,  no  matter  how  effec- 
tive that  machine  is  in  production.  But  it  is  not  claimed 
that  interest  is  based  on  monopolistic  powers;  then  it 
must  be  based  on  a  claim  for  the  use  of  wealth  on  the 
ground  that  such  wealth  is  productive.  This  we  have 
proved  to  be  a  false  principle.  If  based  on  monopolistic 
powers  this  fact  would  give  it  no  ethical  sanction. 

In  determining  scientifically  the  cause  of  any  given 
phenomenon,  when  several  observed  elements  are  pres- 
ent in  any  given  case,  we  eliminate  those  elements 
showing  no  positive  tendency  to  produce  the  observed 
phenomenon,  and  look  upon  that  element  as  a  cause 
without  which  the  phenomenon  cannot  he.  ]n'oduced. 
For  instance,  in  determining  the  element  capable  of  con- 
verting water  into  steam.  We  conclude  that  the  stove 
is  not  the  cause  of  the  water's  conversion  into  steam, 
for  the  stove  without  the  fire  lias  no  tendency  to  pro- 
duce such  an  effect,  while  fire  on  the  earth  or  in  a  grate 
will  produce  such  an  effect.  In  like  manner  we  may  de- 
termine that  the  kettle  is  not  the  cause  of  the  phenom- 
enon, and  following  that  course  we  may  eliminate 
everything  but  heat.  Heat  is  always  present  when  water 
is  converted  into  steam,  and  when  a])pliedto  water  has 
always  a  t'Midcncy  to  jiroduce  such  a  result.  We  there- 
fore conclude  that  heat  is  the  clement  which  converts 
water  into  Ht<'ain.  The  stove,  boiler,  etc.,  may  be  use- 
ful acc('ssf)ries,  but  are  not  the  causes. 

A])plving  a  similar  test  to  the  caus(!  of  the  ])h('nf)m- 
Hiioii  of  j)r(j(luction,  we  are  forced  to  conchulc  that  th(> 
laborer  is  the  sole  catise  of  the  phenomenon.  A  spade 
may  lie  away  mitil    it   rots,  and   still    no  sod    would    it 


54  A  BREED  OF  BARREN  METAL 

upturn  unless  tlie  strong  hand  of  the  laborer  was  upon 
it.  An  ax  would  never  fell  a  forest  oak,  unless  there 
was  behind  it  the  sturdy  brawn  of  toil.  A  reaper  would 
never  cut  a  harvest,  without  the  guiding,  sunburnt 
hand.  A  locomotive  would  never  haul  a  car  without 
the  grimy  fingers  at  the  throttle.  A  needle  would  never 
transmit  a  signal,  without  the  deft  ear  and  hand  of  the 
operator  to  receive  and  record  it.  Yet  the  laljorer  placed 
on  virgin  earth,  without  a  vestige  of  man-made  wealth, 
upturned  the  sod,  felled  the  oak,  cut  the  harvest,  trans- 
ported wealth,  transmitted  signals  and,  stripped  of  all 
man-made  wealth,  could  do  so  again.  Then  the  laborer 
is  the  cause  of  proxUiction ;  wealth  is  not,  capital  is  not. 
That  is  the  conclusion  of  scientific  reasoning  as  well  as 
the  verdict  of  fact.  There  is  not  a  fact  in  natural  sci- 
ence more  conclusively  proven  than  this. 

But  it  is  said  that  the  wealth  loaned  by  the  capital- 
ist aids  the  man  who  uses  it,  and  that  he  should  there- 
fore pay  for  its  use.  Its  being  used  aids  the  capitalist 
far  more,  even  though  he  never  received  a  cent  in  inter- 
est for  its  use.  The  laborer  who  uses  capital  more  than 
repays  its  owner  by  keeping  it  intact.  Nature  in  her 
divine  wisdom  has  decreed  that  wealth  shall  not  be 
hoarded.  If  not  used  by  the  hands  of  labor  in  produc- 
ing more  wealth,  nature,  after  a  few  short  years,  re- 
claims it  as  her  own.  Does  not  the  laborer,  then,  do 
the  capitalist  the  greatest  of  services  by  taking  his 
wealth,  preserving  it  from  the  wrecking  hand  of  time 
and  returning  it  to  him  intact?  It  is  not  an  answer  to 
say  that  the  laborer  is  at  the  same  time  producing  more 
wealth,  a  portion  of  which  is  for  himself.  By  that  very 
act  he  keeps  the  world  moving,  keeps  up  the  march  of 
civilization,  keeps  all  of  us  from  the  fate  of  x^overty- 
stricken  savages.  Here  again  we  meet  with  nature's 
inexorable  law.  Toil  or  perish,  is  the  decree  pronounced 
against  the  race.  It  is  only  by  fraud  committed  against 
the  many  that  a  few  are  exempt. 

The  laborer  unaided  has  gained  a  livelihood.  He 
might  do  so  again.  For  unaided  capital,  there  is  but 
death  and  decay.  How  fortunate  for  the  capitalist  that 
he  can  make  the   laborer  his   mediator!     For  there  is 


A  BREED  OE  BARREN  METAL  55 

not  one  article  of   wealth   which   can   survive  witlioiit 
such  mediation. 

It  is  true  that  this  does  not  agree  with  the  tiger  phi- 
losophy of  early  economists.  Their  niotto  was  that  one 
is  entitled  to  all  that  he  can  get  by  any  means  l\v  which 
he  can  get  it;  if,  indeed,  they  troubled  themselves  little 
about  rights.  On  this  principle  the  capitalist  can,  by 
his  advantageous  position  in  controlling  the  implements 
of  toil,  wrnig  interest  from  the  laborer.  But  does  that 
make  it  right?  That  is  the  principle  practiced  by  the 
tiger  in  springing  upon  the  deer.  That  is  the  principle 
practiced  by  the  highwayman  in  holding  up  his  victim. 
That  is  the  principle  which  says  rapine  is  just  and  lion- 
orable.  Why  not  be  consistent  and  allow  the  highway- 
man to  take  what  he  can,  if  ability  to  appropriate  carries 
with  it  the  right?  The  ethics  of  civilization,  on  the 
other  hand,  teaches:  to  every  man  according  to  his 
labor.  Man  should  be  paid  for  what  he  relinquishes 
in  serving  another,  for  the  trouble  and  exertion  it  cost 
him.  There  is  no  other  subjective  criterion.  Where 
benefits  relinquished  can  be  readily  estimated,  they  are 
the  sole  ethical  guide  to  deserved  remuneration  for  any 
service.  One  knows  what  a  particular  act  cost  him,  but 
not  what  amount  of  benefit  it  was  to  another.  On  this 
ground  the  capitalist  would  not  only  be  entitled  to  no 
remuneration  for  lending,  but  would  by  that  very  act 
receive  a  benefit  for  which  he  should  pay.  And  we  must 
introduce  this  principle  of  justice  into  our  sociology 
before  we  can  expect  to  arrive  at  just  results.  Where 
ability  to  exact  is  the  measure  of  remuneration,  right 
is  might,  and  might  is  force  or  cunning.  Such  a  theory 
put  into  i)ractice  leaves  upon  avarice  or  arbitrary  ])ower 
no  etiiical  check  whatever. 

To  lie  sure  the  elfort  of  the  laborer,  with  the  appli- 
ances wbici)  toiling  hands  and  brains  have  coiu^-ived, 
fa-iliion"(l  tiiid  pfn-fccti'd  through  the  ages,is  nion'  clfect- 
iv;  th  iM  \<  till'  ''IT  )rt  of  the  naked  savage.  Hut  liiis  is 
not  the  (|ue>lion.  The  generation  of  to-day  is  the  licir 
ol  !ill  the  ages.  The  inventive  toihmd  ingenuity  ol  all 
th:  j.Mst  belong  to  all  the  people,  iind  is  more  justly  the 
pni|)erty  of  him  who  uses  them  to  advance  1  he  interests 


50  A  BREED  OF  BARREN  METAL 

of  the  whole  people,  than  of  him  who  Avishes  to  use 
them  for  extortion  only.  The  toiler  is  the  heir  to  the 
ingenuity  of  the  toiler.  If  the  capitalist  has  succeeded 
m  taking  the  wealth  of  the  toiler  of  the  past,  that  fact 
gives  him  a  claim  to  perishable  wealth  alone.  It  gives 
him  no  monopoly  of  the  great  inventions  which  brain 
and  hand  have  wrought.  And  these  inventions,  and 
not  the  fact  that  they  comprise  a  certain  amount  of 
wealth,  give  every  implement  or  machine  from  the  soup 
kettle  to  the  printing  press  its  value  in  production. 
Hoarded  wealth,  untouched  by  the  hand  of  the  laborer 
or  the  inventor,  would  be  absolutely  worthless  in  pro- 
duction. It  would  have  less  effect  in  production  than 
the  kettle  has  in  producing  steam.  Look  at  it  as  you 
will,  wealth  is  not  productive,  but  the  toil  of  the  la- 
borer is. 

If  making  wealth  capital  does  not  relieve  it  from  its 
natural  condition  of  decay;  if  it  is  still  a  charge  on 
him  who  uses  it,  and  useful  only  after  the  toil  of  the 
laborer  adapts  it  to  the  ends  for  which  he  intends  it;  if 
it  is  useful  then  only  as  a  medium  of  applying  the  pro- 
ductive forces  of  the  laborer,  the  capitalist  has  no  claim 
for  remuneration  for  the  services  which  his  wealth 
renders  in  production.  It  has  potential  serviceability 
only  and  that  serviceability  is  incapable  of  being  devel- 
oped by  any  except  the  toiler.  While  the  wealth 
remains  in  the  hands  of  the  capitalist,  that  potential 
serviceability  is  but  a  principle  of  decay.  The  laborer 
whoresists  that  decay  and  developes  that  potential 
serviceability  does  the  capitalist  a  substantial  favor 
poorly  repaid  by  the  loaning  of  capital  on  the  condi- 
tion that  it  shall  be  returned  intact.  The  laborer  is 
not  called  upon  in  justice  to  give  up  any  of  the  gross 
product  of  his  toil,  except  enough  to  keep  the  capital 
which  he  uses  intact  and  to  support  the  state.  There 
is  no  hardship  to  him  in  either  of  these  conditions. 
The  slate  affords  protection  for  his  toil,  and  keeping 
capital  intact  redounds  to  his  advantage  as  well  as  to 
the  advantage. of  all,  for  if  capital  were  allowed  to  de- 
teriorate, productive  labor  could  be  less  efifectively  era- 
ployed  and  the  product  would  be  smaller. 


A  BREED  OF  BARKEN  METAL  0/ 

Even  looking  upon  capital  us  untinished  product,  the 
same  rule  holds  good.  Unfinished  product  from  its  very 
name  is  seen  to  be  unfitted  to  supply  the  wants  of  man, 
the  aim  of  all  production.  An  unfinished  product,  like 
all  other  wealth,  will  become  less  and  less  valuable  by 
the  process  of  time.  It  will  never  finish  itself, but  waste 
away.  The  la))orer  alone  can  finish  it.  His  finishing 
it  adds  to  it  all  the  value  of  the  finished  over  the  unfin- 
ished product,  and  he  should  have  all  of  the  difference 
as  a  remuneration,  giving  to  the  capitalist  or  the  owner 
of  the  unfinished  product  all  that  the  latter  contributed 
to  the  final  ])roduct,  i.  e..  the  value  of  the  unfinished 
product. 

Let  us  sup})ose  that  a  man  has  a  stable  of  horses 
which  he  cannot  personally  use,  and  the  value  of  which 
he  wishes  to  preserve  for  some  future  time.  Would  not 
a  toiler  be  doing  that  man  a  marked  service  by  taking 
these  lioises  and  using  them  for  ten  years,  and  at  the 
end  of  that  time  returning  to  the  owner  an  equal  num- 
ber of  good  young  horses  in  their  stead?  This  would  be 
wealth  lent  without  interest.  (We  are  dealing  with 
wealth,  not  money. )  If  the  capitalist  had  kept  these 
horses,  they  would,  within  the  ten  years,  have  all  grown 
<dd  and  miservicHal)le,  and  he  would,  in  the  meantime, 
have  had  to  pa}'  for  their  keeping.  Under  the  interest 
system,  he  would  have  compelled  the  toiler  who  bor- 
rowed his  horses,  not  only  to  pay  for  their  kee]nng,  Init, 
when  the  horses  had  grown  old,  to  return  to  him  two 
good  young  horses  for  each  one  taken.  It  does  not  Vf- 
quire  a  philosopher  to  decide  who,  in  this  case,  has  the 
better  of  the  l)argain.  We  must  keep  the  fact  constantly 
in  mind  that  the  horses  represent  wealth  which  the 
(MviiiT  cainiot  personally  use  at  the  time  when  he  de- 
cides to  lend  it,  l)ut  whi(di  he  wants  to  i>reserve  for 
some  future  time  I'ndcr  the  present  system,  he  would 
sell  his  horses  and  [)ut  tlu^  money  at  interest;  for,  al- 
though liorses  l)econie  useless  by  the  lapse  of  time,  we 
have  a  fiction  that  the  scra))s  of  pa})er  or  bits  of  metal 
rejirescnt  ing  their  value  increase  in  worth  with  each 
rising  sun. 
Then'  is  a    house  on  a  principal    stref-t  of  a  growing 


58  A  BREED  OF  BARREN  METAL 

city.  The  location  is  the  best.  The  appointments  of 
the  mansion  are  irreproachable.  It  would  make  an  ex- 
cellent habitation.  But  it  is  owned  by  an  eccentric  old 
lady  with  extravagant  notions  of  its  rental  value.  Be- 
sides, no  tenants  can  endure  her  nagging,  and  the  house 
is  left  vacant.  The  snows  of  winter  have  blown  under 
the  door  and  through  the  windoAV  cracks.  Big  patches 
of  mould  have  established  themselves  on  the  damp 
floors.  Rats  have  gnawed  holes  in  the  floors  and  plinths. 
An  urchin  bent  on  mischief  threw  a  stone  through  a 
window  of  an  upper  story,  and  a  heavy  spring  rain 
coming  on,  the  floors  are  flooded.  The  plaster  cracked 
and  fell,  and  the  timbers  warped  and  twisted.  A  seed 
fell  upon  the  stone  steps  and  was  w^ashed  into  a  crack. 
It  swelled  and  grew  and  the  steps  were  misplaced.  The 
damage  to  the  building  from  natural  causes  amounted 
to  a  couple  of  hundred  dollars  in  a  single  year.  The 
next  year  it  was  not  quite  so  bad,  but  the  next  year 
still,  was  worse.  The  house  remained  vacant  and  was 
saved  from  becoming  a  complete  ruin  only  by  expensive 
repair.  Within  the  fifteen  years  that  it  has  remained 
idle  about  one-half  of  the  original  cost  has  been  spent 
for  repairs.  Is  not  this  building  wealth?  Is  not  all 
wealth  subject  to  the  same  law  of  decay?  Is  it  true, 
then,  that  the  capitalist  can  afford  to  allow  his  wealth 
to  lie  idle  rather  than  to  lend  it  without  interest?  Did 
the  house  grow  in  value  in  these  fifteen  years?  If  one 
had  occupied  that  house  during  those  fifteen  years  and 
merely  kept  it  in  repair  without  paying  a  cent  of  rent, 
he  would  have  done  the  owner  a  very  substantial  ser- 
vice. The  owner  would  have  been  spared  all  outlay  for 
repairs  and  would  still  have  a  habitation  fit  for  occu- 
pancy. 

A  great  mill  had  been  built  in  a  prosperous  manufac- 
turing district.  The  ore  which  was  consumed  by  the 
plant  became  more  difficult  to  get  in  that  vicinity, 
while  other  fields  of  supply  were  opened  at  a  distance. 
The  ores  in  the  new  locality  were  plentiful  and  could 
be  manufactured  more  cheaply  there.  The  industry 
was  transferred  and  the  mill  first  built  was  shut  down. 
The  doors  were  closed  and   tbn   building  left  to  stand. 


A- BREED  OF  BARREN  METAL  59 

Twenty-five  years  passed  by.  The  new  mine  became 
exhausted,  and  the  old  center  of  industry  revived.  The 
corporation  which  had  shut  down  its  mill  years  before, 
concluded  to  start  again.  An  elder  seed  had  fallen  be- 
tween two  heavy  pieces  of  machinery  and  there  taken 
root  in  the  accumulated  soil.  As  a  result,  the  heavy 
pieces  were  displaced  and  the  whole  plant  thus  deranged. 
In  another  place,  the  frosts  of  winter  had  caused  a 
wall  to  cave.  The  building  had  become  shaky  and  un- 
safe for  supporting  the  heavy  machinery.  In  other 
places,  rust  had  destroyed  the  fine  bearings  and  weak- 
ened the  cogs.  The  plant  had,  in  fact,  become  a  ruin, 
and  but  a  small  portion  of  the  machinery  could  be  used 
in  the  construction  of  a  new  mill.  This  was  wealth  left 
to  itself.  Did  it  grow?  Now,  if  this  plant  had  been 
kept  ni  operation,  as  it  probably  might  have  been,  had 
no  interest  been  demanded  for  its  use,  and  had  it  thus 
been  kept  in  repair;  although  the  owners  had  never  re- 
ceived a  cent  for  its  use,  they  would  have  been  just  the 
value  of  the  plant  l)etter  off.  They  would  have  been 
done  a  ver}^  substantial  service.  This  would  have  been 
lending  without  interest.  The  persons  who  used  the 
]ilant  would,  probably,  have  been  benefited  by  its  use. 
This  would  have  been  reciprocity  of  services. 

We  see  that  the  principle  upon  which  interest-taking 
is  founded  is  not  only  absolutely  false  but  monstrously 
absurd.  That  it  is  denied  by  every  consideration  bear- 
ing on  the  subject;  that  it  leads  to  injustice  and 
difitress.  The  consequences  of  interest-taking,  as  exem- 
plified in  our  financial  history,  are  ruin  and  disaster. 
Capital  profits  are  founded  on  the  same  principle  as 
interest,  and  differ  onl}'  in  the  manner  in  wliich  they 
are  collected.  Man  is  entitled  to  nothing  for  which  he 
has  not  given  an  equivalent  in  si^'vicf? ;  and  use  of  wealth, 
being  paid  for  by  the  keeping  up  ot  tiiat  wealth,  is  no 
service  for  which  other  remiuieration  can  justly  be 
charged.  We  then  conclude,  that  neither  the  landlord 
nor  the  capitalist,  as  sucli,  should  receive  aught  of  the 
product  of  labor;  hence  the  wJujle  product  should  go  to 
the  toiler. 


CHAPTER  X. 

Objections  AND  Instances  Continued — The  argument   of  Bastiat — Its  import- 
ance—Founded  on  the    assumption   of   spontaneous  productivity   of    wealth 

Reciprocal   services — The   mistakes  of  Bastiat — Money  not    wealth Bastiat's 

illustrations— The  house  and  ship— The  crowns  and  sixpences— Mondor's 
house— Peculiar  conditions— Malthurin  and  the  sack  of  corn— The  same  old 
fallacy — Malthurin  and  the  man  with  eggs— James  and  the  plane— The  interest- 
taker's  demands — What  he  givesup— Tlie  power  of  wealth  and  the  laborer  con- 
trasted—In the  light  of  man's  origin— Thora's  question  as  to  crowns  and 
Bastiat's  answer— Spontaneous  growth  again— The  advantage  of  the  interest- 
taker  as  told  by  Bastiat — The  conclusion  drawn  therefrom — Indefinite  and 
fixed  remuneration— Hoarding— Our  addresses  to  laborer  and  capitalist— In- 
terest generally  applied— Things  making  themselves— Modern  necromancy. 

'■'■That  which  the  hour  creates,  that  can  it  use  alone.'" 

The  argument  of  Bastiat  is  considered  the  argument, 
par  excellence,  for  the  justification  of  interest-taking. 
In  fact,it  is  the  only  argument  on  that  side  of  the  ques- 
tion which  goes  below  the  surface.  If  that  argument 
has  not  proved  interest-taking  right,  political  science 
has,  so  far,  failed  to  justify  it.  The  whole  gist  of  Bas- 
tiat's argument  is  reciprocity  of  services  founded  on  the 
assumption  that  wealth  is  essentially  and  spontaneously 
productive.  The  lender,  the  economist  assumes,  does 
the  borrower  a  service  by  allowing  the  latter  to  use  his 
wealth,  and  the  borrower  should  do  a  service  in  return. 
Paying  interest  on  money  borrowed  is  such  a  service, 
and  unless  the  borrower  pay  interest,  Bastiat  holds  that 
he  returns  nothing  for  the  loan. 

I  contend  that  the  argument  is  entirely  mistaken. 
Wealth  is  not  essentially  and  spontaneously  2)roduc- 
tive,  as  I  have  abundantly  shown.  The  sheep,  without 
the  care  of  the  shepherd,  are  no  more  productive  of 
wealth  than  is  the  barren  daric.  It  is  the  care  of  the 
shepherd  and  the  food  which  he  provides  for  his  sheep, 
which  makes  them  productive  as  wealth.  If  sheep  were 
as  productive  when  allowed  to  run  at  large,  uncared 
for,  there  would  be  no  object  in  having  shepherds.   The 

00 


A  BREED  OF  BARREN  METAL  61 

fact  is  that  the  lloek  would  at  once  become  a  prey  to 
its  hereditary  enemies,  tlie  wolves  and  dogs  and  the  in- 
clement weather,  and,  instead  of  increjising,  would 
dwindle  away  to  very  small  numbers.  Then, as  soon  as 
they  had  become  wild,  they  would  cease  to  be  wealth, 
and  the  labors  of  the  shepherd  would  be  turned  into 
the  labors  of  the  chase,  and  this  labor  would  be  that 
without  which  the  sheep  would  be  unavailable  for  the 
satisfaction  of  human  wants.  This  is  true  of  all  so- 
called  productive  wealth.  Analyze  it  and  we  find  that 
it  can  no  more  exist  without  labor  than  can  any  other 
wealth. 

Then  the  payment  of  interest  is  not"  the  only  service 
which  the  borrower  does  the  lender.  If  the  lender  does 
the  borrower  an  incidental  service  by  lending  him 
wealth,  by  that  very  act  he  does  himself  a  far  greater 
service,  as  it  is  absolutely  necessary  to  lend  wealth  to 
preserve  it.  The  borrower  does  the  lender  a  very  great 
service  by  taking  his  wealth,  keeping  it  for  him  and 
returning  it  to  liim  without  deterioration.  I  have 
already  cited  instances. 

Bastiat  insists,  and  justly,  that  money  is  ncjt  wealth, 
and  that  we  must  determine}  the  laws  of  wealth  by 
considering  real  wealth,  of  which  money  is  but  the  rep- 
resentative. F>ut  tliis  entirely  disposes  of  his  first  illus- 
tration of  sixpences  and  crowns.  If  money  is  not 
wealth  we  cannot  deduce  from  it  the  laws  of  wealth. 
If. Paul's  sixpence  consisted  of  wealth  which  he  did 
not  wish  to  use  for  a  year,  it  would  have  deteriorated 
in  value  at  the  end  of  that  time.  1  therefore  hold 
that  Peter,  (jr  any  other  borrower,  would  have  been  do- 
ing Paul  a  service  by  restoring  to  him  his  wealth  un- 
impaired at  the  end  of  twelve  months 

In  his  illustration  of  trading  a  house  for  a  ship,  Bas- 
tiat  introduces  a  fallatry  which  is  tlie  groundwork  of 
his  plausible  but  l'allaci<jus  argument  for  th(?  justifica- 
tion of  interest.  The  ca])italist  who  actually  lends 
wealth  is  one  who  has  wealtli  which  he  cannot  or  does 
not  wish  to  use  immediately,  or  which  he  wishes  to  lay 
by  and  save  for  some  futures  time.  He  is  one  who  has 
enough  for  the   present,    l)esides  that   which  he    hinls. 


62  A  BREED  OF  BARREN  METAL 

Lent  wealth  is  surplus  wealth,  so  far  as  the  owners 
are  concerned.  Bastiat's  capitalist  is  a  poverty-stricken 
laborer  who.  is  asked  to  fold  his  arms  and  whistle  while 
another  laborer  takes  his  tools  and  uses  them  fo.r  his 
own  benefit.  In  lending,  these  conditions  never  exist. 
The  wealth  which  is  borrowed,  or  upon  which  interest 
and  capital  profits  are  charged,  could  not  have  been  used 
in  production  if  it  had  not  been  borrowed.  Paying  one 
to  lie  idle  or  to  work  with  inferior  tools,  whil'e  by  the 
use  of  his  own  he  might  have  done  better,  is  something 
quiteJrrelevant  to  the  question  of  interest.  Bastiat 
uses  It  to  cover  up  the  real  question  at  issue.  Public 
policy  as  exemplified  in  the  common  law  has  long  ago  ' 
condemned  the  conditions  upon  which  Bastiat's  inter- 
est argument  is  founded.  Let  us  consider  the  real  cap- 
italist, the  lender  of  surplus  wealth. 

Now,  if  Bastiat  should  say  that  a  man,  after  trading, 
a  ship  for  a  house,  took  the  house  to  live  in  and  wanted 
to  borrow  the  ship  for  a  year;  and  that  the  man  who 
traded  the  house  for  the  ship  had  another  house  which 
he  was  content  to  live  in,  and  could  not,  himself,  use 
the  ship  for  a  year,  he  would  have  stated  the  conditions 
under  which  loans  are  really  made.  The  new  ship- 
owner would  have  been  put  to  no  inconvenience  in  giv- 
ing up  the  house,  as  he  would  have  -been  left  a  house 
good  enough  to  live  in.  If  he  did  not  wish  to  use  the 
ship  for  a  year,  he  would  wish  to  have  it  kept  for  him 
that  length  of  time  without  deterioration  in  value..  If 
the  man  who  just  traded  away  that  ship  should  assume 
the  responsibility  of  taking  it.  and  should  use  it  for  a 
year  and  return  it  to  the  owner  without  deterioration, 
or  in  a  better  condition  than  it  would  have  been  in, 
had  the  owner  left  it  idle,  I  contend  that  he  would  thus 
have  been  doing  the  new  ship-owner  a  favor.  The 
owner  of  the  ship  would  have  been  relieved  not  only  of 
the  necessity  of  repairing  his  vessel,  but  he  would  have 
not  even  the  trouble  of  taking  care  of  it,  and  would 
have  it  in  good  order  for  use  at  the  end  of  the  year. 
The  man  who  used  the  ship  would  also  have  been  ben- 
efited by  its  use.  There  would  have  been  reciprocity  of  ' 
services,  the  requirement  of  Bastiat. 


A  BREED  OF  BARREN  METAL  68 

As  to  Bastiat's  third  illustration:  If  Mondor  spent 
his  time  and  surplus  cash  in  Ituilding  a  house  to  live 
in  and  he  has  no  other  house,  he  is  not  in  the  position 
of  the  lending  capitalist.  If  he  have  more  houses  than 
he  can  personally  use,  he  gives  up  nothing  in  allowing 
some  one  else  to  live  in  one  of  them.  The  house  which 
Mondor  cannot  or  does  not  wish  to  use  immediately, 
is  surplus  wealth  which  Mondor  wishes  to  save  for  use 
at  some  future  time.  Such  a  saving  can  be  attained 
only  by  allowing  some  one  else  to  use  the  property, 
and,  in  return  for  its  use,  to  keep  it  .in  repair.  At  least 
that  would  be  the  most  economical  method  for  Mon- 
dor. If  there  were  no  borrowers,  what  would  Mondor 
have  done  with  his  surplus  house?  He  might  close  it  up 
and  pay  for  repairs  made  necessary  by  the  ravages  of 
mould,  rot,  rats,  etc.  That  is,  in  Bastiat's  illustration, 
he  would  pay  the  architect  |800  per  year  for  keeping 
bis  house  from  becoming  a  worthless  ruin.  By  giving 
the  iiouse  to  Valerius  for  a  specified  time,  he  would  de- 
prive himself,  thnn,  of  the  opportunity  of  paying  for  re- 
pairs upon  it.  If  his  other  house  should  burn,  to  be 
sure,  he  might  have  delay  in  gaining  possession  of  the 
house  in  the  hands  of  Valerius,  but  this  is  a  dim  con- 
tingency more  than  compensated  by  having  his  house 
kept  in  repair.  Valerius  stands  for  all  borrowers, 
Mondor  for  all  lenders.  It  would  be  entirely  irrele- 
vant to  say  that  Mondor  might  lend  to  somebody  else. 

Bastiat  thinks  that  as  a  first  condition  of  the  loan, 
Valerius  should  refund  the  money  paid  by  Mondor  to 
the  architect  for  repair  of  the  ravages  of  time  on  Mon- 
dor's  house  But  why  should  Valerius  refund  this 
money?  Bastiat  says  that  it  is  but  fair.  Why  fair? 
Is  Valerius  responsible  for  the  ravages  of  time?  Did 
he  make  the  natural  law  that  houses  and  all  other  forms 
of  wealth  shall  l)e  subject  to  decay?  Do  these  ravag(^s 
make;  the  house  more  useful  to  Valerius?  Why  then 
.should  he,  rather  than  Mondor,  bear  the  brunt  of  the 
law?  Bastiat  i^uerilely  says  that  the  decay  occurs  while 
Valerius  is  in  the  hous(?  and  hence  he  should  make  i1 
good.  Would  it  not  havii  occurrnd  to  a  greater  extent 
had  th(;  hfjuse  b(ien  vacant?   Finally,  when  th((  ravagfss 


04  A  BREED  OB^  BARREN  METAL 

of  time  are  repairod,  who  gots  the  benefit?  Moiulor, 
certainly.  Mon(h)r,  then,  should  pay  the  expense  of 
repairs.  If  Valerius  should  pay  for  tiie  repairs  as  well 
as  pay  rent,  there  would  have  l)een  no  reciprocal  serv- 
ice done  him  for  the  outlay,  and,  according  to  Bas- 
tiat's  own  criterion,  Valerius  could  not  be  charged  with 
the  expens.e.  The  advantage  of  which  Mondor  deprived 
himself  for  the  benefit  of  V^alerius  is  the  measure  of 
the  service  which  he  did  the  latter,  and  the  remunera- 
tion wliich  he  as  lender  should  receive.  He  deprives 
himself,  at  most,. only  of  ^he  opportunity  to  use  his 
house  for  a  specified  time,  should  a  contingency  arise 
making  it  desirable  to  do  so.  Valerius  has  secure  pos- 
session for  a  time,  and  if  for  this  advantage  he  refunds 
to  Mondor  the  three  hundred  dollars  of  architect  hire, 
if  he  stands  between  Mondor's  house  and  the  ravages 
of  time,  he  more  than  repays  Mondor.  Where  then 
comes  in  the  excuse  for  interest-taking?  Interest  in 
this  case  is  commonly  called  rent,  as  it  is  included  in 
the  charge  for  land-rent.  Every  cent  collected  for  rent 
is  an  extortion  for  which  Valerius  gets  no  reciprocal 
service.  If  Mondor  is  paid  for  what  he  relinquishes, 
he  has  no  right  to  inquire  how  much  Mondor  is  thereby 
benefited.  If  Valerius,  while  occupying  the  house  of 
Mondor,  had  saved  it  from  the  flames,  there  is  not  a 
person  living  who  could  not  see  that  he  had  done  Mon- 
dor a  substantial  favor,  and  few  would  have  the  hardi- 
hood to  say  that  he  should  pay  Mondor  for  the  privilege 
of  so  doing  because  Valerius  had  by  the  same  act  saved 
a  habitation  for  himself.  The  case  is  parallel.  It  is 
a  beneficent  law  that  he  who  has  most  need  of  wealth 
is  benefited  most  by  its  use.  It  is  a  relic  of  the  savage 
in  our  nature  that  prompts  to  want  remuneration  not 
only  for  what  we  relinquish,  but  also  to  appropriate 
all  of  the  incidental  benefit  which  may  accrue  to  an- 
other from  our  act.  It  is  the  old  fable  of  the  lion's 
share.     Civilization  can  give  it  no  sanction. 

On  the  other  hand,  if  rent  for  the  house  were  collected 
from  Valerius,  and  Mondor  were  obliged  to  bear  the 
deterioration  due  to  the  ravages  of  time,  after  a  few 
y-ars  hp  would  have  no  house  to  rent.  He  could  not 
eat  his  cake  and  have  it  too. 


A    BREED    OF    BARREN    METAL  (55 

Bastiat's  illustration  of  Malthurin  and  the  sack  of 
corn  repeats  the  same  old  fallacy.  Malthurin,  accord- 
ing to  the  illustration,  must  have  his  sack  of  corn  to 
.  live  on,  or  he  must  work  for  a  pittance  from  day  to 
day  in  order  to  keep  alive;  and  in  that  condition,  he  is 
asked  to  lend  his  sack  of  corn  to  another.  What  an 
illustration  of  a  loaning  capitalist!-  If  he  were  a  cn\n- 
tali^t,  he  would  have  had  more  to  live  on  than  he  wished 
personally  to  use  at  that  time  and  that  sack  of  corn 
ivould  represent  something  which  he  would  have  been 
saving  for  some  future  time.  It  would  have  been  corn 
additional  to  his  present  wants.  If  Jerome  should  take 
this  corn,  and,  at  the  end  of  a  year,  when  if  stored,  it 
would  have  been  damaged  by  weevil,  damp  and  rats, 
should  return  to  Malthurin  a  fresh  sack  of  corn  in  its 
stead,  he  would  have  done  Malthurin  a  substantial 
favor.  Jerome  woukl,  at  the  sanu!  time,  have  produced 
corn  for  himself.  The  service  would  liave  lieen  recip- 
rocal and  Bastiat's  requirement  would  have  been  ful- 
filled. 

Malthurin  would  be  in  the  position  either  of  the  man 
who  was  saving  for  future  contingencies  or  one  who 
had  not  yet  wealth  enough  to  apply  to  some  purpose 
for  which  lie  was  saving  it,  and  wanted  that  already 
hoarded  preserved  for  himself  until  he  had  procured 
more.  As  lending  capitalist,  he  would  be  like  the  num 
who  had  procured  eggs  with  which  to  make  a  cake  and 
wanted  them  reserved  until  he  had  secured  the  sugar, 
milk,  fruit  and  other  ingredients.  If  he  should  store 
the  eggs,  they  would  probal)ly  spoil  before  the  other  in- 
gredients had  been  .secured.  Then,  if  some  one  should 
b(jrrow  his  eggs  and  use  them  on  condition  that  an 
i.'(|ual  number  of  fresh  (!ggs  sliould  l)e  rettirned  I'oi' 
those  borrowed,  when  the  man  had  secured  hisotiicr 
ingredients  f(jr  his  caice,  he  would  have  fresh  eggs  and 
would  have  been  done  an  important  service. 

The  illustration  of  James  and  the  |)lane  is  still  mor»i 
fallacious.  It  jumlili-s  together  in  James,  the  rights  of 
caj)italist,  manufact  uinm"  and  inventor.  The  jut  ual  loan- 
ing capitalist,  as  siKih,  is  an  idler  with  more  wealth 
under  his    control    tlinn    he    can    persnnally     use       He 


(56  A    BREED    OF    BARREN    METAL 

neither  invents  nor  produces.  To  place  James  in  the 
position  of  the  loaning  capitalist,  we  must  think  of 
iiinias  making  a  plane  each  year  to  lay  by  and  sell  at 
some  future  time,  that  he  might  finally  live  at  ease  on 
the  proceeds,  or  gratify  some  other  desire.  Without  bor- 
rowers to  take  his  planes,  he  would  have  to  store  them 
somewhere  to  preserve  them  Rust,  rot,  worm  and  mould 
would  vie  with  one  another  in  their  destruction.  When 
James  wished  to  sell  the  planes,  he  would  find  many 
of  them  well-nigh  worthless.  If  William  should  take 
the  planes  and  use  them  and  return  in  their  stead  good 
new  planes,  would  he  not  be  doing  James  a  substantial 
service?  James  would  have  bright  new  planes  when  he 
wanted  to  use  or  dispose  of  them,  instead  of  rusty  old 
ones,  as  would  have  been  the  case  had  the  planes  been 
stored.  Bastiat  admits  that  wearing  out  within  a  year 
is  a  necessary  concomitant  of  the  usefulness  of  a  plane. 
If  W^illiam  pays  for  that  usefulness  by  supplying  a  plane 
instead  of  the  one  which  had  worn  out,  why  should  he 
be  called  upon  to  pay  for  it  again  in  interest?  There 
would  be  no  justice  in  James  having  the  benefit  of  the 
usefulness  of  the  tool  and  not  be  obliged  to  bear  the  ex- 
pense of  the  wear  incident  to  that  usefulness,  as  well 
as  the  ravages  of  nature.  The  fact  is,  that  interest 
charges  are  not  founded  at  all  upon  the  usefulness  or 
effectiveness  of  this  or  that  tool.  They  are  founded  on 
the  assumption  that  wealth,  apart  from  the  idea  of 
the  inventor,  is  inherently  productive,  which  we  have 
seen  to  be  false. 

We  see,  then, that  the  loaning  capitalist  asks  the  la- 
borer not  only  to  share  with  him  the  wealth  which  the 
laborer's  toil  has  produced,  but  also  to  make  good  the 
destruction  whicli  nature  visits  on  everything  produced 
by  man.  This  is  the  essence  of  interest-taking,  yet  no 
one  can  give  a  good  reason  why  the  laborer  alone  should 
be  held  responsible  for  the  inexorable  laws  of  nature. 
No  one  can  say  why  it  is  just  that  the  laborer  should 
bear  all  of  the  burden  for  but  a  pittance  of  the  reward. 

The  lender  sacrifices  nothing.  The  wealth  which  he 
loans  is  surplus  wealth.  However  potent  as  an  instru- 
ment of  production  in  the  hands  of  others,  it  is  useless 


A  BREED  OF  BARREN  METAL  67 

in  his.  for  his  hands  toil  not,  Tliis  fact  must  be  borne 
in  mind :  Cnless  somebody  borrow  the  wealth  of  the  cap- 
italist, he  must  stand  idly  by  and  see  nature  steal  away 
its  usefulness.  Then  the  person  who  borrows  that 
wealth  and  saves  it  from  the  decay  of  nature,  does  the 
capitalist  an  all  important  service.  It  is  no  answer  to 
say  that  the  laborer  at  the  same  time  gains  an  advan- 
tage from  the  wealth  which  he  borrows.  Does  the  gain 
of  the  laborer  make  the  gain  of  the  capitalist  any  less? 
Capital  cannot  produce,  the  laborer  can.  The  laborer 
has  lived  without  capital,  without  wealth  except  the 
strength  of  his  muscles  and  the  cunning  of  his  brain. 

With  this  strength  and  cunning  alone  to  start  with, 
the  laborer  has  wrested  from  nature  all  that  there  is 
of  wealth  in  the  world  to-day.  Destroy  every  vestige 
of  what  men  call  capital  and  enough  people  would  sur- 
vive the  calamity  to  repopulate  the  world  and  reorgan- 
ize society.  Destro}"  the  ])ower  to  work  and  in  ten 
years  there  would  not  be  a  living  human  being. 

Nobody  who  considers  what  man  has  sprung  from 
will  deny  this.  Man  did  not  come  into  a  world  of 
walled  cities,  palaces  and  machines.  He  was  once  a 
shivering  naki/d  savage, his  im])lements  clubs  and  stones. 
His  bread  hn  plucked  from  the  trees  liy  laI:)or,  his  meat 
by  labor  he  pursued  and  killed.  Man  always  earned 
his  bread  in  the  sweat  of  his  own  brow  or  the  bnnv  of 
somebody  else.  The  laborer  has  the  ])roducing  power 
of  nature;  capital,  the  decaying  principle  of  wealth. 
Why  then  can  it  not  be  confidently  asserted  that  the 
laborer,  apart  from  nature,  exerts  the  only  productive 
force?  The  laborer  can  put  his  stamp  on  the  treasures 
of  nature's  storehouse  and  the  product  is  wealth.  Na- 
ture will  not  rec*;ive  the  stam[)  of  capital. 

Thoreasks:  "Will  an  extra  crown  apjiearat  tliceiul 
of  a  year  in  a  Ijng  of  one  hundred  shillings?  Will  there 
l)e  two  hundred  shillings  in  the  bag  at  the  end  of  four- 
teen years?"'*  No,  nor  an  extra  grain  in  a  bag  of  corn 
(Bastiat  to  the  contrary  notwithstanding.)  Herds  will 
not  increase  without  tlie  laI)orej'',s  care;  fie]ds,untilled, 
will  not  yield  a  iiarvest.      All  of  Nature's  favors  must 

*Ii  will  l)c  rf:iiif>ml)f'rc(l  that  Bastiat  said    crowns  would   not  grow,   but  corn 
would.     V'es,  with  labor. 


68  A  BREED  OF  BARREN  METAL 

be  wrested  from  her  by  the  arm  of  toil.  Where  then  is 
the  justification  of  interest?  From  whatever  point  we 
view  it,  we  can  see  no  warrant  for  the  assumption  that 
wealth  has  the  power  of  spontaneous  growth.  As  we 
have  seen,  if  wealth  does  not  grow  spontaneous!}',  there 
is  no  ethical  basis  for  interest.  Each  man  has  a  right 
to  what  he  produces  and  no  one  has  a  claim  on  what 
is  produced  by  another. 

Let  us  allow  the  great  apostle  of  interest  himself  to 
tell  of  the  advantage  which  the  capitalist  has  over  the 
laborer.  We  have  examined  his  reasons  for  believing 
that  that  advantage  is  just.  Here  is  a  translation  of 
Bastiat's  own  words: 

"Here  are  two  men,  one  of  whom  works  from  morn- 
ing until  night  from  one  year's  end  to  another,  and  if 
he  consumes  all  that  which  he  has  gained,  even  by  su- 
perior energy,  he  remains  poor.  When  Christmas  comes 
he  has  no  more  ahead  than  he  had  at  the  beginning  of 
the  year,  and  has  no  other  prospect  than  to  begin  again. 
The  other  man  does  nothing  either  with  his  hands  or 
with  his  head;  or,  at  least,  if  he  makes  use  of  them  at 
all  it  is  only  for  his  own  pleasure.  It  is  allowable  for 
him  to  do  nothing,for  he  has  an  income.  He  does  not 
work,  yet  he  lives  well,  having  everj^thing  in  abun- 
dance, delicate  dishes,  sumptuous  furniture,  elegant 
equipages;  nay,  he  consumes  daily  things  which  the 
workers  have  been  obliged  to  produce  by  the  sweat  of 
their  brows,  for  these  things  do  not  make  themselves, 
and  as  far  as  he  is  concerned,  he  has  no  hand  in  their 
production.  It  is  the  workingmen  who  have  caused  the 
corn  to  grow,  polished  the  furniture,  woven  the  carpets. 
It  is  our  wives  and  daughters  who  have  embroidered 
these  stutfs.  We  work  for  him  and  for  ourselves.  For 
him  first,  and  for  ourselves  if  there  is  anything  left. 
But  here  is  something  more  striking  still.  If  the  former 
of  these  two  men  consumes  within  a  year  any  profit 
which  may  have  been  left  to  him  within  that  year,  he 
is  always  at  the  point  from  which  he  started,  and  his 
destiny  condemns  him  to  move  incessantly  in  a  perpet- 
ual circle  and  monotony  of  existence.  But  if  the  other, 
the  'gentleman,'  consumes  his  income  within  a  year,he 


A  BREED  OF  BARREN  METAL  69 

has  the  year  after,  in  those  years  that  follow,  and 
throughout  all  eternity  an  income  inexhaustible,  per- 
petual. Capital  then  is  remembered,  not  only  once  or 
twice,  but  an  indefinite  number  of  times.  So  that  at 
the  end  of  a  hundred  years  a  family  which  has  placed 
twenty  thousand  franks  at  five  per  cent  interest  will 
have  had  one  hundred  thousand  franks,  and  this  will 
not  prevent  it  from  having  one  hundred  thousand  more 
in  the  next  century.  In  other  words,  for  the  twenty 
thousand  franks  which  represent  its  labor  (or  the  labor 
of  some  one  else),  it  will  have  a  ten-fold  value  in  the 
labor  of  others.  In  this  social  arrangement  is  there 
not  a  monstrous  evil  to  be  reformed? 

•'And  this  is  not  all.  If  it  should  please  the  family 
to  curtail  their  enjoyment  a  little — to  spend,  for  ex- 
ample, nine  hundred  franks  instead  of  a  thousand,  it 
may,  without  any  labor,  without  any  other  trouble 
than  that  of  investing  the  other  hundred  franks  a  year, 
increase  its  capital  and  its  income  in  such  progression 
that  it  will  soon  be  able  to  consume  as  much  as  one 
hundred  families  of  producing  workers.  Does  not  this 
go  to  prove  that  society  is  nursing  in  its  bosom  a  hid- 
eous cajicer  which  ought  to  be  removed  at  the  risk  of 
sonif  temporary  suffering?" 

Yes,  Bastiat !  it  certainly  does,  and  3'our  illustrations 
of  i)lanes  and  ships  and  sacks  of  corn,  although  they 
may  obscure  the  seat  of  the  terrible  disease,  cannot 
hide  its  numifestations.  The  skilled  social  physician 
(•an  see  through  your  thin  mystifications.  He  would 
be  obtuse,  indeed,  who  could  not  see  a  wrong  in  re- 
warding one  person  a  hundred  times  more  than  another 
lor  a  given  service.  He  would  be  still  more  ol)tuse 
who  could  not  see  the  fallacy  in  the  assumption  that 
•  iiie  whr)  hoards  a  given  amount  of  wealth  and  lends  it 
is  entitlt'd  t<;  n'lnuncration  for  the  act  ad  iiijiniluin. 
Y(Ui  assert  that  ihe  twenty  thousand  franks  represent 
the  hib(»r  which  tliaf  family  has  i)('rformed.  This  mav 
ov  may  not  be  truf.  Many  of  our  modern  fortunes  rep- 
resent wealth  appropriated  from  the  toil  of  others. 
They  may  represent  hibor,  or  may  be  theresult  of  labor, 
but  as  we  have  seen  above,  they  are  not  labor  and  have 


(0  A   BKEED    OF    BARREN    METAL 

none  of  labor's  productive  power.  Labor's  result  is 
wealth,  nothing  more,  useful  for  consumption,  or  to 
the  laborer  in  production,  but  of  itself  subject  only  to 
decay  and  destruction.  Why  it  should  claim  remuner- 
ation is  not  clear,  unless  for  its  gradual  but  no  less 
etfective  disappearance  from  the  earth.  And,  aftsr  all, 
to  speak  of  remunerating  either  capital  or  labor  for 
services  is  utterly  absurd.  Inanimate  things  have  no 
claims  on  man. 

But  granting  for  the  sake  of  argument  that  these 
twenty  thousand  franks  should  earn  for  their  owner  a 
remuneration,  on  what  groundof  right  or  justice  should 
they  earn  a  greater  remuneration  than  twenty  thousand 
franks'  worth  of  the  labor  of  the  toiling  citizen?  Why 
is  the  capitalist's  fortune  more  worthy  of  return  than 
the  twenty  thousand  franks  which  have  gone  to  the  sup- 
port of  the  laborer  and  his  family.  The  worker's 
strength  must  be  kept  up  by  constant  feeding.  The 
wealth  of  the  capitalist  is  almost  as  perishable,  it  must 
also  be  kept  up  by  constant  accretion.  The  labor  pro- 
duces more  wealth  from  the  strength  which  he  obtains 
from  the  food  which  he  consumes.  The  owner  of  the 
franks  produces  no  wealth,  neither  do  the  franks.  Let 
them  lie  idle  in  a  vault  and  they  would  not  increase 
one  jot  for  all  eternity.  Store  the  real  wealth,  repre- 
sented by  them,  and  you  w'oukl  have  nothing  left  at  the 
end  of  a  score  of  3^ears.  Why  then  should  we  remuner- 
ate the  owner  of  the  franks  not  for  one  year  alone  but 
for  all  eternity, while  the  wealth  which  the  laborer  re- 
ceives is  gone  when  consumed  and  w^e  remunerate  him 
but  once.  We  go  further  and  not  only  compel  the 
toiler  to  make  good  to  the  owner  of  the  franks  the  rav- 
ages of  nature,  but  also  to  pay  him  a  hundred-fold  for 
what  he  produced,  inherited,  or  perhaps  obtained  by  fraud 
or  force. 

Why  should  we  place  such  a  premium  on  the  saving 
of  wealth  and  rev.ard  its  production  so  little?  Is  ac-- 
cumulation  the  end  of  civilization?  Here  again  we  run 
counter  to  natural  law.  Natural  law  says  that  hoard- 
ing wealth  beyond  our  needs  is  criminal  folly,  and  im- 
poses the  heaviest  of  fines  on  miserly  instincts.  All  the 


A  BREED  OF  BARREN  METAL  71 

progress  made  by  man  has  been  in  the  direction  of 
hoarding  less  as  compared  with  current  consumption. 
All  improvements  in  machinery,  all  improvements  in 
methods  of  industry,  have  been  in  the  direction  of  giv- 
ing man  more  to  use  and  less  to  hoard.  And  it  is  nec- 
essarily 86.  The  more  we  hoard  the  larger  a  percentage 
of  our  annual  product  must  be  devoted  to  the  keeping 
up  of  the  wealth  already  hoarded,  and  the  less  we  will 
have  to  use.  Under  such  conditions  undue  hoarding 
would  lead  us  to  such  a  point  that  nearly  all  our  ener- 
gies would  be  spent  in  keeping  up  the  wealth  already 
gained,  and  whije  our  store  would  be  large,  we  should 
be  unable  to  satisfy  our  current  wants. 

Nature  rebukes  hoarding  in  most  unmistakable  terms. 
Her  fines  are  levied  on  every  dollar's  worth  of  wealth 
that  is  stored  for  future  use.  She  declares  that  the 
whole  effort  of  man,  if  he  would  progress,  must  be  in 
making  his  product  agree  in  comparison  with  his  capi- 
tal, and  in  reducing  his  surplus  to  what  is  absolutely 
necessary  in  supplying  capital  for  the  increasing  popu- 
lation. The  yearly  penally  in  our  present  hoard  is 
about  three  billion  of  dollars,or  one-fifth  of  the  wealth 
produced.  It  behooves  us  to  make  that  hoard  as  small 
as  possible,  while  retaining  the  effectiveness  of  our 
industries. 

Yet  in  the  face  of  this,  we  say  to  the  world:  "You 
who  have  .saved  even  so  much  as  a  laborer  produces 
every  five  years  of  his  active  life,  can  live  all  the  rest 
of  your  days  in  idleness,  if  you  so  desire,  and  your  chil- 
dren and  your  children's  children  may  do  the  same.  He 
who  has  iKjt  been  fortunate  enough  to  save  must  divide 
with  you  his  substance  even  to  keeping  you  in  idleness. 
He  must  toil  unceasingly  and  when  he  shall  have  been 
ii;atli''red  to  his  fatln-rs  his  children  after  him  must  toil, 
and  a  jxjrtion  ot'ev<M"ything  which  they  produce  belongs 
to  you  and  yours  by  tlie  right  which  your  saving  gave 
you.  And  the  toilers  must  n(jt  be  niggardly  about  feed- 
ing you.  Your  share  shall  every  fourteen  years  equal 
yoiir  <»ri|^inal  saving,  and  yet  your  fortune  shall  never 
grow  less,  liy  the  simple  act  of  saving  a  fortune,  insig- 
nificant as  compared  with   what  one  laborer   produces 


72  A  BREED  OF  BARREN  METAL 

during  his  lifetime,  you  have  removed  from  yourself 
and  posterity  the  curse  of  humanity!  Man  must  eat 
his  bread  in  the  sweat  of  his  brow?  Or,  perhaps,  your 
father  has  done  it  for  you;  perhaps  an  uncle,  perhaps 
a  more  distant  relative  whom  you  never  saw  has  left 
you  a  small  amount  of  perishable  wealth,  and  by  that 
act  saved  you  from  the  necessity  of  laboring,  made  you 
a  sharer  in  the  results  of  other's  toil.  By  a  sort  of 
vicarious  industrial  merit  you  have  been  made  a  favored 
one  of  earth. 

To  the  man  who  produces  unceasingly,  but  who  can- 
not or  does  not  save,  we  say:  ''You  must  stay  nature's 
destroying  hand.  The  substance  of  the  capitalist  is 
sacred ;  see  to  it  that  you  preserve  it.  Keep  it  replen- 
ished after  the  waste  of  time,  and  besides  see  that  he 
has  enough  to  live  on.  Then,  if  there  is  anything  left, 
you  may  take  it  as  your  own.  Hoarding,  you  must  re- 
member, exempts  forever  from  toil;  mere  producing 
gives  only  the  right  of  sharing  that  production  with 
those  who  toil  not." 

These  are  the  speeches  which  we  act  out  when  we 
sanction  the  practice  of  interest-taking.  No  questions 
are  asked  as  to  how  the  wealth  was  hoarded.  Its  possessor 
is  virtually  pensioned  fur  all  time  and  billeted  on  the 
community.  Interest  rewards  the  capitalist  ad  infin- 
itum. It  is  wrong.  If  for  the  twenty  thousand  franks 
representing  the  laborer's  toil  he  is  remunerated  but 
once,  the  twenty  thousand  franks  which  represent  the 
capitalist's  earnings  should  gain  for  the  capitalist  but 
one  remuneration.  That  remuneration  would  be  the 
right  to  consume  wealth  to  the  amount  of  twenty  thou- 
sand franks,  nothing  more.  In  the  light  of  logic  and 
ethics  no  other  conclusion  is  possible.  Men  have  equal 
rights. 

It  will  be  seen  how  absurd  this  idea  of  interest  is,  if 
we  consider  that  it  never  could  be  generally  apj^lied. 
If  all  were  to  save  and  lend  their  money  out,  or  place 
it  where  it  would  produce,  all  should  be  able  to  collect 
interest,  and  to  live  without  engaging  in  actual  produc- 
tion. If  one  can  live  idle  by  the  productive  power  of 
wealth,  all  who  save  wealth  should  be  able  to  live  idle. 


A  BREED  OF  BARREN  METAL  73 

But  we  readily  see  that  if  all  saved  wealth,  there  could 
be  no  interest  collected  and  the  wealth  saved  would  be 
useful  for  consumption  only.  All  would  be  obliged  to 
work  to  live.  We  cannot  conceive  of  a  paradise  of  uni- 
versal idleness.  The  wealth  would  be  found  to  be  un- 
productive. If  it  would  be  unproductive  then, why  not 
now?  It  is  a  false  principle  which  cannot  be  generall}'' 
applied.  Try  to  apply  it  generally  and  the  result  will 
show  the  unproductiveness  of  wealth.  Wealth  is  unpro- 
ductive now,  but  it  ma}^  be  used  as  an  instrument  to 
take  what  others  produce.  This  is  what  interest-taking 
means. 

Bastiat  has  well  said  that  things  do  not  make  them- 
selves, and  that  the  capitalist  has  certainly  no  hand  in 
their  making.  He  might  have  added  that  neither  did 
the  wealth  which  the  capitalist  saved  produce  these 
things.  Leave  it  unattended  and  it  could  not  have 
preserved  itself  from  destruction.  The  capitalist,  then, 
had  no  right  to  take  these  things  from  another.  The 
wealth  which  he  had  produced  had  disappeared  years 
before  under  the  inexorable  law  of  nature,  yet  he  is  still 
living  on  it.  What  an  anomaly!  Can  one  eat  his  cake 
and  have  it  too?  The  capitalist  does,  but  he  is  the  only 
example  of  the  occult  phenomenon.  Then  it  is  but  a 
trick.  He  steals  the  cake  by  legal  jugglery  from  the 
mouths  of  its  rightful  owners,  and  by  pretty  fictions 
convinces  them  that  it  is  his  own.  Better  than  the 
lamp  of  Aladdin,  better  than  the  magician's  wand, 
even  bfstter,  far  better  than  the  phihjsopher's  stone,  is 
the  economic  fable  by  whose  potent  alchemy  the  pos- 
sessor of  a  little  h(jarded  wealth  can  multiply  his  gold 
ad  injinitiirn,  and  levy  contriltutions  on  the  generations 
of  men  to  the  end  of  tiiiu".  And  it  is  a  magic  capable 
of  transmission  without  the  trouble  or  pains  of  study. 
Its  adepts  are  legion.  By  its  action  their  posterity  are 
made  p(;nsioners  on  all  the  generations  of  men.  Under 
its  fecun(hiting  influence  the  capitalist's  wealth  be- 
comes th(!  fabled  cup,  that,  however  often  drained,  is 
forevf^r  full ;  it  becouKjs  the  purse  wliich  alw.-iys  con- 
tains a  dollar.  N'erily  tlu;  s(!cr<'1  of  llie  eapilalist  is  ln't- 
ter  than  the  power  of  kings. 


74  A  BREED  OF  BARREN  METAL 

But,  like  all  necroniahcy,  when  unveiled,  interest- 
taking  IS  but  the  jugglery  of  the  faking  charlatan. 
When  the  wealth  which  he  has  saved  is  gone,  the  inter- 
est-taker mystifies  others  and  takes  their  wealth  tosupi^ly 
its  place.  It  is  by  the  toil  of  others  that  the  cup  is 
kept  full.  He  shuffles  the  empty  vessel  into  the  place 
of  the  brimming  goblet,  which  he  drains  in  turn.  His 
magician's  wand  is  but  the  barbarous  custom  of  tribute 
which  changes  not  but  directs  the  stream  of  wealth 
from  the  hand  of  the  toiling  producer,  into  the  coffers 
of  the  idle  parasite.  It  has  obtained  so  long  that  men 
have  forgotten  to  resist  it.  Interest,  the  all-powerful 
necromancer,  is  founded  on  the  monstrous  assumption 
that  wealth  has  within  it  the  power  of  spontaneous 
growth.  There  is  no  mistaking  the  conclusion  that  in- 
terest-taking is  wrong, 


CHAPTER  XL 

Objections  Continued — Without  interest,  it  is  said,  there  would  be  no  motive 
forsaving — Thefalsity  of  this  proposition  pointed  out — A  sufificient  motive — 
Will  the  capitalist  lend  without  interest? — The  reason  why  he  will,  if  he  cannot 

■  get  it — The  effect  upon  the  producer  of  the  discontinuance  of  interest-taking  — 
The  only  remedy  for  low  wages. 

A  sane  'man  luill  not  icrvng  himself  because  he  is  not 
alloiced  to  wron(j  another. 

It  is  asserted  that  without  the  practice  of  interest- 
taking,  there  would  be  no  saving,  that  all  capital  would 
l>e  destroyed,  that  we  would  be  hauipered  in  our  pro- 
duction and  retrograde  towards  the  savage.  Does  our 
civilization  depend  for  its  existence  upon  the  thoroughly 
barbarous  principle  of  tribute-taking?  You  may  as 
well  say  that  without  gluttony  there  would  be  no  eat- 
ing; because  one  is  not  allowed  to  gorge  himself,  he 
will  refuse  to  take  nourishment  to  sustain  life.  Why 
would  there  be  no  object  in  saving  if  we  could  not  col- 
lect interest?  If  I  produce  more  wealth  than  I  can  use 
at  present,  and  want  to  save  it  for  use  at  some  future 
time,  will  it  not  be  as  much  mine  when  I  want  to  use 
it,  if  I  lend  it  without  interest,  as  if  I  collect  ten  per 
cent  interest  for  its  use?  The  contracts  for  the  return 
of  capital  and  the  paying  of  interest  are  in  no  way  in- 
terdependent. One  can  be  made  witiiout  the  other.  I 
(;an,  as  now,  make  an  agreement  with  the  borrower, 
that  if  I  allow  him  to  use  a  portion  of  the  wealth  con- 
trolled by  me,  he  will  return  it  to  me  at  the  end  of  a 
certain  stated  period  in  as  good  a  condition  as  when  I 
lent  it.  That  is,  he  will  make  good  the  ravages  of  time. 
It  is  not  necessary  for  me  at  the  same  time  to  conlra(!t 
lor  interest,  and  if  the  agn-enKtiit  is  carried  out,  I  will 
l)e  sure  «jf  getting  back  all  that  I  have  ])r(jduced.  This 
is  as  great  an  iii<;i'iit iv<'  1o  saving  as  any    iiKirtal  wnuM 


76  A   BJIEED    OF    BARREN    METAL 

require.  One  would,  as  now,  look  forward  to  a  time 
of  ease,  when  he  might  live  on  what  he  had  saved  dur- 
ing his  life  of  active  production.  He  would  be  obliged 
to  lend  his  wealth  in  order  to  save  it.  The  same  se- 
curity would  be  required  as  under  the  system  of  interest- 
taking.  In  fact,  loans  would  be  much  more  secure,  for 
toilers  would  have  reduced  burdens  to  meet  and  be  more 
prosperous,  and  it  is  a  well-established  principle  in 
business  that  collections  are  easy  in  times  of  prosperity. 
The  argument  of  no  motive  for  saving  unless  interest 
is  allowed,  implies  that  humanity  is  so  avaricious  that 
if  one  cannot  get  what  does  not  belong  to  him,  he  will 
not  care  for  what  he  has.  Self-interest  will  see  to  it, 
that  enough  is  saved  to  keep  things  moving.  Men  usu- 
ally, unless  checked,  take  all  that  they  can  get,  but  are 
satisfied  with  what  they  can  get,  unless  they  can  get 
more.  Under  no  interest,  each  would  get  what  he  de- 
served, no  more. 

Under  the  system  of  no  interest,  men  will  not  get  rich 
while  they  eat  and  sleep  and  loaf  or  debauch,  as  at 
present.  Statisticians  cannot  fill  pages  with  calcula- 
tions showing  how  much  richer  each  succeeding  breath 
finds  a  Vanderbilt  or  an  Astor.  Mere  existence  will 
not  be  a  wealth-collecting  enterprise.  As  soon  as  one 
ceases  to  engage  in  productive  toil,  his  fortune  will 
begin  to  grow  less  and  decrease  each  day  by  just  the 
amount  which  he  spends.  He  will  have  all  that  he  pro- 
duces to  use  as  he  pleases,  but  he  must  take  his  hands 
off  the  production  of  others.  To  say  that  under  such 
conditions  men  will  not  save,  to  say  that  men  must 
have  more  than  they  are  entitled  to  before  they  will 
take  care  of  what  they  have,  is  like  saying  that  rulers 
will  not  govern  unless  the  people  give  up  to  them  all 
popular  rights.  As  much  as  royalty  has  been  curtailed, 
they  are  still  not  anxious  to  give  up  what  is  left. 

It  is  quite  true  that  under  a  system  of  no  interest 
there  would  be  less  lending.  There  would  be  fewer  bor- 
rowers, for  every  one  would  be  given  his  own.  Then 
men  would  personally  use  more  of  their  own  wealth  in 
employing  themselves.  But  instead  of  being  undesira- 
ble, this  would  be  a  great  advantage.    There  would  be  a 


A  BREED  OF  BARREN  METAL  77 

nmch  larger  number  of  productive  workers,  much  more 
wealth  produced,  and  hence  a  larger  share  for  each 
consumer.  Each  could  more  readily  employ  himself 
or  take  care  of  himself  than  now.  There  would  be  less 
motive  or  necessity  for  borrowing.  But  there  would  be 
the  strongest  motive  for  "laying  by"  something  for 
declining  years,  a  motive  strengthened  by  the  knowl- 
edge that  'what  one  produces  will  not  be  taken  from 
him  by  idlers.  Each  man  has  the  strongest  motive,  too, 
for  keeping  his  surplus  wealth  in  the  hands  of  some 
one  who  will  preserve  it  for  him.  For,  as  we  have  seen, 
wealth  cannot  be  hoarded  with  impunity. 

Another  will  arise  and  say:  "Suppose  the  capitalist 
refuses  to  lend  his  wealth.  Suppose  the  owners  of 
houses,  for  instance,  refuse  to  let  them  be  used,  how 
will  the  poor  be  sheltered?''  The  case  is  impossible. 
Suppose  all  men  were  insane,  we  should  have  a  terrible 
world;  but  they  are  not,  and  to  argue  from  such  a  con- 
dition is  starting  with  a  false  premise.  Experience 
teaches  us  that  men  will,  on  the  whole,  do  that  which 
they  believe  to  be  most  conducive  to  their  interest.  If 
they  can  get  something  for  nothing  they  will  take  it; 
if  not, they  get  it  as  cheaply  as  they  can.  If  a  man  had 
two  thousand  dollars  invested  in  a  house  which  he 
could  not  use  himself  and  for  which  he  had  no  pros- 
pect of  collecting  rent,  rather  than  allow  that  house  to 
go  to  ruin  and  the  two  thousand  dollars  to  be  lost  he 
would  either  let  that  house  on  the  condition  that  it  be 
kept  in  repair  or  he  would  sell  it.  If  he  wisiicd  to  sell 
it,  he  would  bn  ol)liged  to  sell  it  to  those  who  wanted 
it,  and  on  such  conditions  that  they  could  buy  it.  If 
no  intHrf'st  were  charged  on  the  purchase  price,  any 
renter  could,  within  a  few  years,  buy  the  house  which 
he  occupies  by  merely  apjjlying  to  the  ))ur(;has(;  ])ric(\ 
rent  and  interest  chargrns  now  paid.  In  that  way  the 
bulk  of  houses  now  l)uilt  wcjuld  continue  to  be  occupied 
as  now,  although  many  might  change  ownership.  As 
for  the  ]ial)il:it  ions  for  the  increase  of  ))oi)ulat  ion,  they 
would  be  simihirly  j>rovid('d.  There  would  probal)ly  be 
8ur[)liiH  weailh  and  it  must  be  ht-ld  in  sonif  form. 
There  is  no  bc'llcr  fonn  for  the  pn'scrval  ion  of  wealth, 
bullion  excepteti,  than  tiiut  of  buildings. 


78  A  BREED  OF  BARREN  METAL 

To  the  producer,  the  discontiinifince  of  interest-tak- 
ing would  be  an  unmixed  blessing.  He  would  be  enabled 
to  use  the  wealth  which  its  owners  could  not  use,  and 
with  it  produce  more  wealth.  He  could,  at  the  same 
time,  make  up  for  them  the  inevitable  destruction  vis- 
ited on  wealth  by  nature,  and  increase  his  own  sub- 
stance. He  would  be  released  from  the  hard  conditions 
which  now.  so  often,  make  production  unprofitable  to 
all  except  the  money-lender  The  burden  on  business 
which  now  sends  the  country  into  practical  bankruptcy 
every  decade, and  makes  ninety-five  per  cent  of  all  busi- 
ness men  fail,  would  be  removed.  The  toiler  would  not 
be  obliged  to  hand  over  his  substance  in  interest  to 
these  who  toil  not,  and  would  be  able  to  accumulate  a 
surplus  of  his  own  or  to  shorten  the  hours  of  toil.  There 
would  be  no  drones  among  those  capable  of  working. 
As  soon  as  one  refused  to  work,  his  fortune  would  he- 
gin  to  melt  away,  and  even  if  the  amount  of  the  wealth 
he  had  accumulated  were  up  into  the  millions,  instead 
of  multiplying,  as  at  present,  it  would  begin  to  slip 
from  the  clutches  of  the  idler  It  would  be  only  a  ques- 
tion of  time  until  the  fortune,  however  large,  would  be 
exhausted,  and  the  idler  and  his  descendants  would  be 
obliged  again  to  take  up  their  burden  with  the  rest  of 
mankind.  The  accumulated  fortunes  of  the  more  for- 
tunate would  be  amply  sufficient  to  supply  their  declin- 
ing years,  and  there  would  be  enough  also  to  educate 
their  children  and  to  give  them  a  start  in  life;  but  they 
would  not  grow  richer  than  their  fathers  unless  they 
worked  and  added  something  to  the  wealth  of  the  world. 
The  worthless,  idle  scion  of  a  wealthy  family,  would 
be  a  thing  unknown.  No  fortune  would  be  sufficient  to 
bear  his  extravagances  for  a  lifetime.  He  could  not 
indulge  every  luxurious  whim.  Once  amenable  to  the 
benign,  unshackled  law  of  nature,  that  man  must  eat 
his  bread  in  the  sweat  of  his  brow;  he  who  inherited  a 
fortune  would  grow  poorer  and  poorer,  unless  he  pro- 
duced, until  finally  he  would  be  obliged  to  work,  beg 
or  starve  All  idlers,  rich  and  poor,  would  be  placed 
on  an  equal  footing  The  wealthy  idler  could  not  save 
himself  by  refusing  to  lend.     If  he  tried  to  hoard  his 


A  BREED  OF  BARREN  METAL  79 

wealth,  nature    would  punish  liim  by  destroying   it  all 
the  more  rapidly. 

And  this,  as  we  have  seen,  is  the  only  way  in  which 
the  toiler  can  be  benefited.  There  is  not  enough  pro- 
duced for  him,  the  interest-taker  and  the  landlord.  He 
is  entitled  to  the  entire  production  after  keeping  up 
the  fixed  capital  of  the  country.  If  he  would  increase 
his  wages,  he  nuist  insist  upon  his  rights,  and  do  away 
with  interest-taking,  and  appropriate  rent.  Until  he 
does  this  he  will  have  to  bear  a  constantly  increasing 
burden,  which  will  finally  crush  him  to  the  earth.  If 
burdens  are  to  be  made  lighter  for  toiling  shoulders, 
more  shoulders  must  support  these  burdens. 


CHAPTER  XII. 

Interest-taking  Wrong — A  scientific  test — Phenomena  explained — Industrial 
panics — The  rapid  accumulation  of  wealth  in  the  hands  of  the  few — Poverty  of 
toilers,  etc.,  etc. 

"i?i/  their  fruits  ye  shall  know  them.^^ 

Interest-taking,  then, is  wrong.  It  has  no  warrant  in 
ethics.  It  contradicts  natural  law.  Its  logical  con- 
sequences are  absurdities.  Its  basis  is  an  untruth,  its 
practice  an  imposition.  One  single  dollar  collected 
that  way  is  a  dollar  extorted,  taken  without  a  shadow 
of  return.  But  the  enormity  of  the  amount  extorted 
makes  interest-taking  a  most  potent  factor  in  economic 
disorders. 

The  scientific  test  of  an  inductive  theory  is  the  num- 
ber of  observed  phenomena  which  can  be  explained  by 
it.  There  are  a  number  of  the  observed  phenomena  of 
economic  science  still  awaiting  explanation. 

1.  The  cause  of  industrial  depressions  and  financial 
panics  manifesting  themselves  j^eriodically  and  extend- 
ing to  nations  with  all  sorts  of  government  and  revenue 
systems,  but  all  of  whose  financial  systems  are  founded 
on  rent  and  interest-taking. 

2.  The  extremely  rapid  accumulation  of  wealth  in 
the  hands  of  a  comparativeh'  few  non-producers. 

3.  The  abject  poverty  of  a  large  percentage  of  the 
producing  masses. 

4.  The  failure  of  improved  machinery  to  better  the 
conditions  of  the  producing  masses  in  a  degree  at  all 
commensvirate  with  the  increased  producing  power 
which  it  has  given  to  the  laborer. 

5.  The  fact  that  non-producers  receive  much  the 
largest  salaries. 

6.  The  fact  of  so  many  laborers  being  doomed  to 

80 


A  BREED  OF  BARREN  METAL  81 

involuntary  idleness  at  times  when  they  are  most  in 
need  of  employment  and  there  is  most  need  by  others  of 
the  goods  Avhich  they  might  produce. 

7.  The  fact  that  work  is  looked  upon  as  a  boon,  zmd 
in  times  of  greatest  industrial  depression  the  most  ex- 
travagant inidertakings  seem  to  promote  prosperity. 

8.  The  fact  that  destructive  wars  often  stimulate 
industry  and  open  up  to  nations  new  eras  of  prosperity, 
although  both  life  and  treasure  have  been  lavishly 
squandered,  and  the  laboring  force  of  the  nation  made 
less. 

9.  The  tendency  of  unwarlike  nations  to  fall  into 
industrial  and  political  slavery. 

10.  The  tendency  of  lavish  wealth  to  undermine  the 
integrity  of  the  nation  and  lead  to  its  decay  and  final 
destruction. 

11.  The  decay  of  the  American  yeoman  farmer,  the 
unprofitableness  of  his  toil  and  the  consequent  tendency 
of  rural  ]M3pulations  to  drift  to  the  cities. 

12.  The  heav}'  and  rapidly  increasing  mortgage  in- 
debtedness of  the  countrv. 


CHAPTER  XIIL 

Financial  Panics— The  explanation  of  their  causes— Rent  and  interest  charges 
too  large  to  be  met— What  they  are— What  we  have  to  meet  them— Country 
compared  to  a  great  business  concern — The  difference — Estimates  and  figures 
— Interest  concluded  to  be  the  cause  of  financial  distress — Another  way  of 
reaching  the  same  conclusion— Objections— Necessary  charges  of  production  — 
What  is  saved  by  wage-earners — A  summing  up. 

False  lyi'iiiciples  lead  to  evil  results. 

It  is  self-evident  that  financial  and  industrial  panics 
show  derangement  in  financial  or  industrial  systems  or 
both ;  just  as  certainly  as  sickness  shows  derangement  in 
the  animal  system.  This  periodical  derangement  in 
financial  and  industrial  systems  has  never  before  re- 
ceived a  satisfactory  explanation,  if  indeed  it  has  ever 
received  any  explanation  at  all.  The  taking  of  unearned 
incomes  made  possible  by  the  private  collection  of  rents, 
and  the  collection  of  interest  and  capital  profits  fully 
explains  these  panics. 

The  explanation  is  that  they  who  produce  are  not 
allowed  to  retain  enough  of  their  product  to  pa}'-  neces- 
sary current  expenses, and  they  fail.  When  many  fail 
at  the  same  time  there  is  a  panic. 

Interest  is  not  a  necessary  expense  of  production. 
Neither  is  rent;  at  least  from  the  standpoint  of  the 
whole  people.  If  capital  were  lent  without  interest  it 
could  be  used  to  just  as  much  advantage;  if  the  rent  of 
land  went  to  the  whole  people,  land  would  be  just  as 
productive. 

It  is  not  difficult  to  show  that  the  rent  and  interest 
charges  on  the  country's  industry  are  too  large  to  be 
met,  and  at  the  same  time  pay  the  current  exj^enses  of 
production.  Under  these  conditions  business  men  must 
fail  and  allow  their  property  to  pass  into  the  hands  of 
others.     General  failure  produces  panic. 

Interest  and  rent  charges, added  to  royalties  and  spec- 

83 


A  BREED  OF  BARREN  METAL  83 

Illative  profits,  amount  to  three  and  one  half   billions 
or  more  per  year. 

We  have  availaljle  to  meet  this  charge  but  about  a 
billion  and  one-half  per  year.  This  is  cause  enough  for 
financial  panic.  A  few  estimates  will  show  that  this 
is  not  a  hollow  assumption.  According  to  Poor's  manual, 
the  rents  and  capital  profits  paid  on  railway  property 
in  the  year  1891-2  was,  in  round  numbers,  four  hundred 
and  eighteen  millions  of  dollars.  According  to  the  ab- 
stract of  the  Eleventh  Census,  mortgages  paid  in  round 
numbers  in  1889four  hundred  million  of  dollars  in  in- 
terest. According  to  the  same  authority,  the  manu- 
facturing capital  of  the  country  amounted  in  1890  to  six 
and  one-half  t)illions,  and  it  paid  an  interest  charge  of  at 
least  three  hundred  and  ninety  millions.  That  capital 
pays  an  interest  and  capital  profit  of  more  than  eight 
hundred  and  fifty  millions,  so  that  after  allowing  liber- 
ally for  the  amount  of  manufacturing  capital  inchided  in 
the  item  of  mortgages  and  deducting  enough  to  meet  all 
future  duplications  in  figtires,  we  would  still  have  three 
hundred  and  ninety  millions  additional  paid  upon  it  in 
interest  and  capital  profits.  The  mining  cajiital  of  the 
country  is  estimated  to  pay  a  capital  profit  of  two  hun- 
dred and  six  millions  per  year.  At  six  per  cent  it  would 
l)ay  a  charge  of  over  seventy  millions  annually.  Thn 
public  di-l)r  iniys  an  interest  charge  of  ninety-five  and 
(Uie  half  millions.  The  capital  employed  in  retail  and 
wholesale  business  pays  a  capital  profit  or  interest  of 
not  less  than  three  hiuidred  and  sixty  millions  per  an- 
num. The  house  and  office  rent  of  persons  who  live  in 
hired  houses,  exclusive  of  the  rent  of  land  on  which 
these  h(juses  are  located,  is  not  less  than  two  hundred 
millions  i)er  year.  Bank  discounts  in  commercial  trans- 
actions are  far  up  into  the  millions,  but  cannot  here  be 
estimated  with  any  certainty.  Clearings  of  sixty  bil- 
lions per  ye'ar  wijuld  indicatr;  discounts  of  hundreds  of 
millions. 

The  banks  show  a  capital  jtrofit,  lu.-t,  of  sixty-seven 
millions  per  year.  Hired  farms  i)ay  on  improvements, 
which  is,  strictly  speaking,  an  interest  charge,  fully 
twenty-five  millions  per  annum.     Insurance,   lire  aud. 


84  A  BREED  OF  BARREN  METAL 

life,  collects  an  interest  charge  on  its  capital,  of  sixty- 
five  millions.  Fisheries  pay  an  interest  charge  of  two 
and  one-half  millions. 

LumlDering  capital  pays  an  annual  interest  charge  of 
not  less  than  thirty-five  millions.  Then  there  are  large 
miscellaneous  interest  charges  that  I  shall  not  attempt 
to  estimate.  The  aggregate  of  these  already  named  is 
not  less  than  two  billion  thirty-three  million.  Add 
to  this  three  quarters  of  a  billion,  the  amount  charged 
annually  for  rents  and  not  included  in  the  above, 
and  a  quarter  of  a  billion  or  more  for  royalties  on 
mines,  oil  wells  and  timber,  then  add  speculative 
profits,  and  we  will  have  at  least  three  and  one-half 
billions  unearned  charges  to  pay  yearly.  Considering 
the  fact  that  bank  discounts  are  not  included,  the  esti- 
mate is  extremely  modest.  These,  as  we  see, are  largely 
composed  of  interest  proper  and  capital  profits. 

This  may  be  arrived  at  in  another  way.  The  wealth 
of  the  United  States  is  estimated  at  something  more 
than  sixty-five  billions  in  1890.  Homes  owned  by  their 
occupants,  a  portion  of  the  farm  property  of  the  United 
States,  and  the  property  of  some  very  small  retailers  is 
all  that  escapes  paying  interest  and  capital  profits.  Fif- 
teen billions  would  be  a  large  estimate  for  this  non- 
interest  and  rent  paying  wealth,  leaving  about  fifty 
billions  to  pay  interest  and  rent.  It  is  a  well  known 
rule  of  economics  that  where  any  capital  used  in  busi- 
ness tends  to  collect  interest,  all  capital  used  in  busi- 
ness will  tend  to  so  collect  interest,  for  if  the  business 
man  could  make  as  much  by  loaning  his  capital  as  he 
could  by  employing  it  in  business,  he  would  not  take 
the  risks  of  business.  On  that  principle  we  see  that  our 
estimates  of  interest  and  rent  charges  are  not  too  large. 

Besides  the  interest,  rent  and  speculative  charges 
above  estimated,  we  pay  the  creditor  class  an  average 
of  one  billion  or  more  per  year,  on  account  of  the  ap- 
preciation of  our  money  standard.  Within  the  last 
twenty  years  our  money  standard  has  appreciated,  as 
compared  with  staple  commodities,  between  thirty-five 
and  forty  per  cent.  This  is  denied  by  no  intelligent 
person,  and  would  involve  the  yearly   payment    to  the 


A  BREED  OF  BARREN  METAL  85 

creditor  class  of  fully  the  sum  named  above.  But  we 
need  take  no  notice  of  this  in  our  present  estimates,  as 
we  are  calculating   on  a  gold  basis. 

It  is  conceded  by  all  authorities,  that  after  paying 
the  current  expenses  of  production — wages,  repair, 
necessary  improvements  in  machinery,  deterioration, 
etc.,  ten  per  cent  of  the  gross  product  is  a  very  large 
estimate  of  the  margin  of  profits,  including  rent  and 
interest.  The  gross  product  of  the  industries  of  the 
United  States  is  not  more  than  fifteen  billions  yearly, 
and  hence  the  amount  available  to  pay  rent  and  inter- 
est is  not  more  than  a  billion  and  one-half  yearly.  This 
will  fall  short  by  two  billions  of  meeting  the  demands 
upon  it. 

Even  without  actual  itemizing  it  may  readily  be  seen 
that  the  interest  charges  of  the  country's  industries  are 
enormous.  An  attempt  is  made  to  collect  interest  on 
every  dollar  invested  in  business  and  on  every  dollar 
representing  delfts  unpaid.  And  this  must  be  paid  out 
of  the  gross  product  of  each  year.  From  each  year's 
product,  the  wealth  of  the  world  must  be  kept  up. 
Buildings,  machinery — everything  must  be  kept  in  re- 
pair. Improvements  for  use  in  the  future  must  be 
taken  from  the  stock  of  the  present.  The  increasing 
population  must  be  supplied.  There  is  not  enough 
wealth  produced  to  meet  all  of  these  obligations. 
P^ither  the  current  expenses  of  production  cannot  be 
paid  or  the  fixed  charges  of  rent  and  interest  cannot  be 
met.  If  current  expenses  are  not  paid,  manufacturing 
plants  deteriorate,  fixed  capital  is  encroached  upon, 
wages  are  reduced  and  laborers  thrown  out  of  emplo}'- 
ment.  Current  obligations  are  not  met.  The  business 
man  finally  becomes  a  liankrupt,  or  the  wage-workers 
becom<;  bankrupts  and  outcasts  depending  on  charity  for 
su])pf»rt.  If  interest  is  not  paid,  then  the  wealth  hypoth- 
I'ftalf'd  fni-  lh(>  loan  is  appropriated  Jiy  the  lender,  and 
the  borrowi  r,  iailiiig  to  meet  his  obligations,  l)ecomes 
a  bankrii])t.  IT  rents  are  defaulted  the  natural  resources 
of  the  coiinlry  are  withdrawn  from  usi;  in  ])roduct i(in. 
He  who  had  been  using  tln'in  becomes  a  bankrupt  and 
industry  is  prostrated.     When  nil  expenses  of  produc- 


86  A  BREED  OF  BARREN  METAL 

tion  exceed  the  gross  product,  the  industries  of  the 
country  are  not  paying  as  a  whole.  If  that  condition 
of  things  continues,  the  industries  of  the  country  or  a 
large  percentage  of  them  will  bankrupt.  A  majority 
of  the  business  of  the  country  must  go  into  the  hands 
of  a  receiver,  pay  up  aj)ercentage  of  its  debts  and  make 
a  new  start. 

The  country  wath  all  of  its  allied  industries  is  analo- 
gous to  a  mammoth  business  concern.  When  it  con- 
tracts greater  liabilities  than  it  can  meet,  it  fails,  and 
we  have  a  financial  panic.  But  unlike  a  mammoth 
business  concern,  the  industries  of  the  country  do  not 
bankrupt  as  a  whole.  There  is  always  a  considerable 
percentage  of  the  individual  industries  of  the  country 
which  pay  a  profit  even  in  time  of  panic.  These  are 
gaining  ventures  while  the  average  of  all  business  will 
show  a  balance  on  the  side  of  loss.  These  survive  panic 
and  others  fail.  A  failure  of  the  industries  of  the  coun- 
try to  j)ay  as  a  whole  is  made  manifest  by  the  failure 
of  a  large  percentage  of  the  industrial  institutions  of 
the  country.  This  state  of  bankruptcy  is  chronic. 
Counting  everything,  the  aggregate  liabilities  of  the 
individual  industrial  establishments  of  the  country  are 
alwa3's  greater  than  their  assets.  The  majority  of 
individuals  of  the  industrial  world  are  always  in  a  state 
of  potential  bankruptcy,  and  it  is  credit  alone  which 
stays  the  granting  of  the  receivership.  Men  in  business 
become  involved  as  debtors  and  creditors.  Mutual 
confidence  in  the  meeting  of  all  liabilities  tends  to  keep 
business  moving  for  a  time,  and  industries  seem  pros- 
perous. Any  disturbing  of  credit  or  sliaking  of  confi- 
dence precipitates  a  financial  crisis.  There  is  a  panic, 
numerous  failures,  liquidations  at  a  discount, and  busi- 
ness goes  on  anew  until  the  obligations  become 
obviously  larger  than  the  wherewithal  to  meet  them, 
when  another  panic  ensues.  The  failures  recurring 
ever}'  day  act  as  a  sort  of  safety  valve  to  put  off  the 
time  of  panic. 

These  are  the  conditions  which  lead  to  financial  panic. 
It  is  nonsense  to  say  that  any  considerable  portion  of 
the  business  concerns  of  the  country  would  regularly 


A  BREED  OF  BARREN  METAL  87 

and  necessarily  fail  unless  their  liabilities  were  greater 
than  their  available  assets.  This  is  the  onh'  condition 
under  which  a  failure  can  occur  in  one  case  or  in  ten 
thousand;  in  a  country  grocery  or  a  manufacturing  es- 
tablishment with  an  output  of  millions.  What  brings 
about  this  condition? 

It  is  the  foundation  stone  on  which  our  industrial 
S3'stem  is  built.  The  basic  principle  of  our  industrial 
s^'stem  leads  us  to  recognize  obligations  which  we  can 
never  meet.  It  is  the  principle  which  asserts  that  a 
dollar  will  grow  into  two  dollars  in  a  number  of  years 
and  keep  on  multiplying  until  it  represents  all  of  the 
wealth  on  earth.  It  is  because  we  tr}-  to  pay  a  rent  and 
interest  charge  of  three  and  one-half  billions  with  a 
net  product  or  margin  of  profits  of  about  a  billion  and 
one-half.  It  is  l:)ecause  it  costs  us,  besides  rent  and  in- 
terest, about  thirteen  and  one-half  billions  of  dollars  to 
yield  a  product  of  fifteen  billions  of  dollars,and  we  try 
to  charge  that  product  with  three  and  one-half  liillions 
of  dollars  in  unearned  charges  also. 

There  is  no  fiction  in  these  statements.  According 
to  Atkinson,  a  successful  business  man  makes  a  profit 
of  but  six  per  cent  on  his  investment,  including  inter- 
est. According  to  the  same  authority,  a  successful 
manufacturer  receives  less  than  five  and  one-half  per 
cent  of  the  gross  product  of  his  establishment.  Accord- 
ing to  the  Census  Report  for  1890,  the  margin  of  profits, 
including  interest,  for  successful  manufacturing  estab- 
lislinifMits  was  nine  and   seven-tenths   ])er  cent.     This, 

My  estimate  then  has  given  the  benefit  of  all  doubt 
to  the  othpr  sidf,  and  yet  it  shows  that  we  fall  be- 
liind  aliout  two  billir)ns  pnr  year  in  meeting  obliga- 
tions, under  a  rent  and  interest  system. 

Now  let  us  take  into  consideration  that  more  than 
ninety  pf-r  cent  of  those  who  engage  in  business  fail; 
that  they  make  nothing  whatever,  I)ut  rather  lose. 
Wh.'H  we  consider  that  a  vast  number  of  those  who 
aid  in  production  are  so  underpaid  that  they  actually 
want  for  tlx-  ncr-cssarics  of  life,  and  thai  nearly  a.   mil- 


88  A  BREED  OF  BARREN  METAL 

lion  of  persons  in  this  country  are  on  an  average  invol- 
untarily idle  and  unsupported  by  industry,  we  will 
conclude  that  if  losses  of  the  unsuccessful  ventures  were 
balanced  against  the  profits  of  the  successful  ones,  the 
margin  of  profits  above  necessary  expenses  would  be 
reduced  very  materially.  But  even  place  that  margin 
where  the  census  figures  for  manufactures  place  it,  at 
about  fourteen  per  cent  on  the  capital  invested  or  ten 
per  cent  of  the  gross  product,  and  we  would  have  but 
about  a  million  and  one-half  left  after  the  current  neces- 
sary expenses  of  production  are  paid,  exclusive  of  rent, 
interest,  royalties,  capital  profits,  etc.  Now  the 
charges  for  these  things  are  about  three  and  one-half 
billions,  leaving  the  small  annual  deficit  of  tw'o  bil- 
lions, wdiich  is  not  met  and  hoards  itself  up  for  the  fu- 
ture financial  panic.  This  estimate  is  made  on  the 
basis  of  a  gross  yearl}''  product  of  fifteen  billions  for  all 
of  the  industries  of  the  United  States,  and  this  I  be- 
lieve to  be  a  close  estimate.*  It  has  been  placed,  to  be 
sure  at  twenty  billions,  but  no  figures  which  I  can 
obtain  will  bear  out  the  latter  estimate.  I  can  account 
for  it  only  on  the  supposition  that  many  products  are 
counted  twice,  in  their  form  as  raw  material  and  in  the 
finished  product.  The  finished  product  alone  should 
be  counted  in  estimating  the  gross  product  of  a  coun- 
try's industries,except  such  product  as  is  exported,  for 
wealth  is  useful  for  consumption  only  in  its  final  form. 
.  Thus  we  cannot  add  the  cost  of  the  wool  in  the  coat 
to  the  final  cost  of  the  coat,  for  the  wool  has  already 
been  included.  In  the  same  way  the  value  of  wheat  is 
included  in  the  flour  (except  the  wheat  exported),  the 
value  of  the  ore  is  included  in  the  finished  machinery, 
•  etc.   Then,  when  weconsider  that  manufactures  amount 

♦According  to  the  Census  figures,  the  gross  product  of  manufacturing  establish- 
ments for  1890vvas  9.370  million  dollars;  the  gross  products  of  agriculture,  2,460 
million  dollars:  the  gross  product  of  mines,  587  million  dollars.  From  this  must 
be  subtracted  ,5,1.59  million  dollars, the  cost  of  raw  material  used  in  manufactures. 
This  would  leave  but  7,2.58  million  dollars  in  tangible  wealth,  produced  in  the 
United  States  in  1890,  the  only  important  item  left  out  being  lumber.  During 
the  same  period  the  cost  of  transportation  was  1,205  million  dollars.  This  was 
of  course  wealth  produced, or  at  least  two-thirds  of  it,  the  actual  cost  of  operating. 
Then  personal  and  professional  services  and  mercantile  services  in  getting  the 
goods  to  the  consumer  could  not  possibly  have  amounted  to  more  than  si.x  and 
one-half  billions  within  a  year.  That  would  show  that  the  middleman  got  nearly 
as  much  as  all  others  combined,  and  yet  would  place  fifteen  billions  as  the  limit 
of  yearly  production  of  wealth  in  the  United  States, 


A  BREED  OF  BARREN  METAL  89 

to  less  than  ten  billions  annually,  including  all  of  this 
raw  material,  and  farm  products  to  less  than  three  bil- 
lions, including  that  sold  to  manufacturers  as  raw 
material ;  and  that  the  product  of  mines  is  worth  half 
a  billion  per  year,  nearly  all  of  which  is  included  in 
the  cost  of  manufactures,  it  is  difficult  to  figure  out  a 
gross  product  of  more  than  fifteen  billions.  We  have 
seen  that  not  more  than  a  billion  and  one-half  of  this 
can  be  paid  in  unearned  incomes  without  trenching  on 
the  necessary  expenses  of  production.  But  there  are 
fixed  charges  to  be  met  of  more  than  double  this  amount. 
For  the  last  decade  we  have  been  paying  fixed  charges, 
as  the  railways  put  it,  on  an  average'of  three  and  one- 
quarter  billions  per  year.  This  would  aggregate  thirty- 
two  and  one-half  billions  in  a  decade,  with  but  fifteen 
billions  that  could  be  applied  with  impunity  to  its  pay- 
ment. This  is  all  that  could  be  spared  after  paying 
current  expenses  of  production  other  than  rent  and  in- 
terest. There  is  an  ejiormous  deficit.  The  consequence 
is  that  we  do  not  pay  current  expenses  of  production. 
Business  men  fail  instead,  and  they  alone  are  paid 
whose  claims  are  secured.  The  money-lender,  the  land- 
lord and  the  royalty  collector,  all  have  their  claims 
secured,  and  the  laborer  and  the  active  business  man 
are  they  who  lose  and  suffer.  If  an  accounting  has 
been  put  off  for  a  decade,  the  balance  against  the  active 
business  man  has  become  so  great  at  the  end  of  that 
time  that  he  is  no  longer  trusted;  he  is  pressed  and 
fails.  This  is  why  business  panics  occur,  and  the  sole 
reasfui  why  business  panics  occur.  We  try  to  pay  un- 
earned incomes  to  a  greater  amount  than  we  are  capa- 
ble of. 

Another  consideration  will  show  that  industry  is  un- 
able to  bear  the  burden  imposed  upon  it.  According  to 
the  figures  of  the  census  for  1890,  the  wealth  of  the 
United  States  has  within  the  last  decade  increased 
twenty-two  billions.  This  estimate  is  made  in  British 
gold  and  ignores  the  appr<'(;iation  of  the  money  stand- 
ard. This  w(nild  he  a  yearly  increase  of  about  two  and 
one-fifth  liilli(jns,  un  increase  of  nearly  three-fourths  of 
a  billion  ovi-r  t iif  fiyinv's  (Induced  by   estinuiting   from 


90  A  BKEED  OF  BARREN  METAL 

the  observed  margin  of  profits.*  Now  the  charge  against 
this  would  be  an  average  of  three  and  one-quarter  bil- 
lions per  year,  leaving  a  very  large  deficit. 

But  it  may  be  said  that  there  is  no  necessary  connec- 
tion between  the  annual  saving  of  the  industries  of  the 
country  and  the  amount  which  they  are  able  to  pay  in 
fixed  charges,  on  a  solid  financial  basis.  The  fixed 
charges,  like  the  current  expenses  of  production,  are  paid 
out  of  the  gross  pnxiuct  of  fifteen  billions.  That  is 
quite  true.  There  need  not  be  any  connection  between 
the  savings  of  the  country  and  the  abilitv  to  pay  fixed 
charges,  but  as  a  matter  of  fact  there  is.  Thesimple 
reason  is  that  at  least  all  that  is  consumed  is  really  nec- 
essary for  the  payment  of  current  expenses  of  production 
other  than  fixed  charges,  or  the  charges  of  reiit  and  in- 
terest. If  that  is  true,  only  the  wealth  saved  can  be 
applied  to  the  payment  of^-ent  and  interest  without 
trenching  an  the  necessary  current  expenses  of  jDroduc- 
tion,  leading  to  repudiated  obligations,  distrust,  panic 
and  bankruptcy.  It  is  not  difficult  to  show  that  all 
that  is  now  saved  is  all  that  could  be  saved  after  pay- 
ing current  necessary  expenses  of  production  other  than 
rent  and  interest.  As  a  general  proposition,  what  a 
people  actually  spends  is  the  best  measure  of  what  it  is 
necessary  for  that  people  to  spend.  There  is  great  and 
expensive  luxury  in  the  country.  That  might  be  dis- 
pensed with.  But  will  any  one  'assert  that  what  is  now 
spent  in  luxury  might  not,  if  indeed  it  should  not,  be 
spent  in  supplying  the  wants  of  toilers?  We  have  a 
million  devoted  to  chronic  idleness.  Would  it  not  take 
a  goodly  sum  to  pay  such  wages  for  such  hours  of  toil 
that  with  our  present  product,  that  million  would  find 
a  place  in  the  industrial  world,  and  become  self-sup- 
porting, self-respecting  citizens?  We  have  other  mil- 
lions living  on  short  rations.  It  would  take  another 
goodly  sum  to  pay  them  wages  for  their  toil  that  would 
give  them  a  coinpetency  and  make  them  self-respecting 
citizens  of  a  self-supporting  republic.  There  are  obli- 
gations amounting  to  millions  unmet,  rei^udiated  every 

*This  discrepancy  may  be  accounted  for  by  the  fact    that    the  estimate   of  the 
margin  ofprofits  did  not  take  into  consideration  the  savings  of  wage-earners. 


A  BREED  OF  BARREN  METAL  91 

vear.  Those  who  hohl  them,  often  render  a  service  for 
which  they  get  no  return.  Would  it  not  make  a  hole  in 
the  luxury  account  to  meet  all  of  these  honest  (obliga- 
tions? Everything  points  to  the  conclusion  that  what 
is  saved  annually  in  the  United  States  and  appears  as 
an  aiuiual  increment  to  the  national  wealth,  is  the  max- 
imum amount  that  can  be  spared  after  paying  the  cur- 
rent necessary  expenses  of  production,  other  than  rent 
and  interest,  and  is  hence  the  greatest  amount  which 
can  be  applied  to  the  payment  of  r^^nt  and  intnrest  and 
other  unearned  charges  without  leading  to  l)ankruptcy, 
widespread  in  proportion  to  theamount  by  which  these 
fixed  charges  exceed  the  net  produce  of  the  nation,  or 
the  yearly  increase  of  national  Avealth. 

I  mean  b}'  the  necessary  charges  of  production,  the 
charges  without  which  production  could  not  be  con- 
tinued in  its  present  etTectiveness.  The  fact  of  a  land- 
lord collecting  rent  on  a  certain  piece  of  land,  makes 
that  land  no  more  productive.  The  fact  of  a  money- 
lender collecting  interest  on  the  wealth  which  he  lends, 
makes  that  wealth  no  more  useful  to  the  laborer.  If 
the  land  and  the  wealth  could  both  be  secured  without 
rent  or  interest,  the  laborer  could  with  them  produce  as 
much  new  wealth  as  though  both  interest  and  rent 
were  being  collected.  But  the  charge  for  labor  is  diti'er- 
ent.  If  the  laborer  does  not  receive  his  wages,  he  can- 
not get  food  to  keep  up  his  strength  and  he  becomes 
unal)le  to  produ«e.  If  he  receives  inadequate  wages  his 
powers  of  production  are  impaired,  his  children  are 
starvt'd  and  grow  up  weak  and  ignorant,  poor  industrial 
workers,  [)ooi-  citi/C<;ns,  expensive  as  invalids  or  crim- 
inals. Productiveness  cannot  be  kept  up  to  its  original 
standard  of  effectiveness.  Then  in  manufacturing, 
machinery  must  be  kej^t  in  re]iair  or  the  plant  will 
lose  in  effectiveness  and  finally  become  worthless. 
Raw  material  must  be  paid  for  or  ]iroduction 
cannot  continue  In  farming,  land  must  be  fertil- 
izt'd,  seeds  ])rocur<'d,  madiinery  k<*i)t  up,  etc.  In  both, 
taxps  must  bf>  ])aid  1o  secure  the  protection  of  govern- 
ment. These  >vre  expenses  whicli  must  be  i)ai(i,  and 
t  hese  are  the  i'xpeii«es-  which  calcul;i1  ions  both  from  t  he 


92  A  BREED  OF  BARREN  METAL 

margin  of  profits  and  the  annual  savings  of  wealth 
show  to  fall  but  about  a  billion  and  one-half  short  of 
the  gross  product  of  the  country's  industries  for  each 
year. 

I  say  that  two  billions  a  year  is  above  the  maximum 
amount  which  can  be  applied  to  interest  and  rent  pay- 
ing in  this  country  without  leaving  necessary  expenses 
of  production  unpaid,  and  I  say  it  advisedly.  While, 
according  to  the  census,  the  country  makes  a  net  sav- 
ing of  two  and  one-fifth  billions  per  year,  nearly  half  a 
billion  of  that  is  saved  by  wage-earners  and  certainly 
cannot  be  applied  to  either  current  necessary  expenses 
of  production  or  interest  and  rent  charges  without  be- 
ing re-borrowed.  I  use  wage-earner  in  the  broad  sense. 
Those  persons,  professional  or  otherwise,  who  are  not 
rich  but  receive  comfortable  salaries  for  real  services 
rendered.  I  base  my  calculation  on  deductions  from 
the  census  figures  of  distribution  of  wealth.  If  ninety- 
one  per  cent  of  the  population,  including  wage-earners, 
own  but  twenty-nine  per  cent  of  the  wealth  of  the 
country,  they  cannot  in  the  past  possibly  have  saved 
more  than  twenty-nine  per  cent  of  the  wealth  saved, 
whil'^  the  other  nine  per  cent  or  wealthy  portion  of  the 
population  must  have  saved  at  least  seventy-one  per 
cent  of  the  annual  saving.  As  the  wage-earners  had 
comparativelv  a  much  larger  share  of  the  wealth  of  the 
country  in  1880  than  in  1890,  betweei>  1880  and  1890 
they  must  have  saved  less  than  the  above  named  propor- 
tion, which  would  leave  their  saving  but  about  half  a 
billion  in  two  billions,  added  to  national  wealth  each 
year 

Thus  if  A  had  one  thousand  dollars  and  B  eight  hun- 
dred dollars  in  1880  and  they  both  together  saved  one 
thousand  from  1880  to  1890,  and  in  1890  A  had  eighteen 
hundred  and  B  one  thousand  dollars,  it  would  show 
that  B  saved  but  one-fifth  of  the  total  saving  for  the 
decade,  although  his  property  was  more  than  one-third 
of  the  whole. 

Then  only  what  is  left  after  deducting  the  savings  of 
wage-earners  from  the  total  national  savings,  can  be 
applied  to  the  payment  of  interest  and   rent   without 


A  BKEED  OF  BARREN  METAL  93 

trenching  on  necessary  expenses  of  production,  and 
leading  to  financial  embarrassment.  Thus  we  arrive  at 
substantially  the  same  conclusion  as  that  reached  by 
estimates  from  the  margin  of  profits. 

Fortunes  go  on  piling  up  under  the  law  of  interest, 
and  after  all  checks  and  counter  tendencies  have  been 
negatived,  we  have  a  trade  depression  every  ten  years  or 
oftener  and  a  panic  every  twenty  years.  The  fact  is, 
a  financial  flurry  can  be  produced  any  time  the  creditor 
class  demands  money,  for  there  are  not  available  assets 
to  meet  their  demands  and  at  the  same  time  keep  busi- 
ness moving.  Money,  the  only  payment  accepted  by 
the  interest-taker,  is  nearly  always  massed  in  the  hands 
of  the  creditor  class  or  can  be  collected  there  on  the 
slightest  provocation.  In  times  of  confidence,  business 
is  kept  moving  by  shifting  liabilities,  but  in  times  of 
doubt  and  uncertainty,  from  whatever  cause  brought 
about,  much  of  the  business  of  the  country  finds  it  im- 
possible to  meet  its  obligations  and  files  into  bank- 
ruptcy. The  cleverest  speculator  cannot  long  keep  his 
business  moving  by  borrowing  from  one  to  pay  another, 
unless  debts  are  very  small  as  compared  with  the  busi- 
ness done.  Just  so  with  the  majorit}^  of  business  men. 
The  piling  up  of  debts  always  ends  in  collapse,  and 
their  interests  are  so  interlinked  that  the  fall  of  one 
brings  down  a  hundred.  It  is  nonsense  to  say  that  lack 
of  confidence  is  the  cause  of  financial  panic.  Unless  the 
ground  principles  of  business  produce  instability,  want 
of  confidence  can  have  no  effect.  Men  realize  that  a 
great  number  of  the  business  undertakings  of  the  coun- 
try are  not  able  to  pay  what  they  have  undertaken, and 
they  therefore  lose  cofidence.  A  building  never  fell 
through  lack  of  confidence,  it  is  lack  of  foundation 
rather.  Those  why  say  that  the  panic  was  caused  by 
the  floating  (jf  non-paying  securities  are  right,  so  far  as 
they  go,  but  they  might  have  added  that  a  large  mass 
of  securities  must  necessarily  be  non-paying,  and  it  is 
the  principles  which  make  them  non-paying,  coupled 
with  the  attempt  to  make  them  pay,  which  are  the  real 
cause  of  th(3  panic. 

But  some  one  remarks,  if  that  were  true  we   would 


04  A  BREED  OF  BARREN  METAL 

liave  financial  panic  all  of  the  time.  Not  necessarily. 
There  is  a  little  attacliment  to  the  steam  engine,  called 
the  safety  valve.  Wliile  that  is  in  order  the  pressure 
on  the  boiler  is  not  likely  to  become  dangerous,  unless 
some  unusual  freak  is  developed.  Liquidation  is  the 
safety  valve  of  the  business  engine.  Statisticians  say 
that  more  than  ninety  per  cent  of  all  businessmen  fail. 
These  failures  occur  every  day,  every,  week,  every  month 
every  year.  Those  who  fail  are  the  persons  who  have 
failed  to  meet  current  necessary  expenses  of  produc- 
tion, together  with  rent  and  interest.  If  they  have  failed 
to  meet  rent  and  interest,  their  property  is  taken  from 
them,  they  bankrui)t,  formally,  their  slate  is  cleared 
and  they  are  allowed  t(j  start  new.  The  arrearages  do  not 
have  to  be  made  up.  That  is  a  very  happy  regulation,  for 
the  arrearages  of  everybody,  under  the  present  system, 
could  not  possibly  be  made  up. 

Again,  panic  is  kept  off  for  a  time  by  using  fixed  cap- 
ital as  a  pledge  to  borrow  back  the  money  paid  in  inter- 
est and  rent  so  that  it  may  be  applied  to  the  current 
necessary  expenses  of  production  and  the  business  kept 
in  the  same  hands.  TJiis  process  goes  on  until  the  cap- 
ital remaining  in  the  hands  of  the  losing  business  man 
is  no  longer  sufficient  to  secure  credit.  His  obligations 
then  come  to  a  head,  he  fails.  Starts  are  made  about 
the  same  time,  then  failures  come  about  the  same  time. 
It  takes  a  time  for  debts  to  accumulate.  An  important 
failure  leads  to  others  being  watched,  pressed  and  driven 
to  the  wall.     We  have  financial  panics. 

To  make  this  point  still  plainer,  let  us  take  an  illus- 
tration. We  will  suppose  that  a  farmer  owns  fifty  acres 
of  land  and  on  that  land  raises  wheat.  He  sells  his 
crop  for  six  hundred  dollars.  Of  that  amount  seed  cost 
him  fort3'-five  dollars,  taxes  twenty-five  dollars,  insur- 
ance five  dollars,  the  feed  of  team,  one  hundred  dollars, 
deterioration  of  fences,  buildings,  machinery  and 
stock  ,  forty  dollars,  the  threshing  of  grain,  fifty  dol- 
lars, and  harvest  help  with  board  for  the  same,  forty 
dollars.  Let  us  suppose  that  the  other  two-hundred 
and  ninety-five  dollars  is  required  by  the  farmer  and 
his  family  to  live  on,  and  to  educate  his  children.  His 


A  BREED  OF  BARREN  METAL  95 

necessary  expenses,  the  necessary  expenses  of  contin- 
ued production,  in  his  case  takes  allot"  the  gross  product 
and  he  can  pay  no  rent  and  no  interest.  He  saves 
nothing.  Now,  if  he  and  his  family  could  live  on  two 
hundred  and  fifty  dollars  per  year  he  could  save  forty- 
five  dollars  in  a  twelvemonth  or  he  might  apply  it  to 
rent  or  interest  without  showing  any  signs  of  business 
failure  or  becoming  a  less  etfective  factor  in  production. 
But  let  us  suppose  that  the  farmer  can  save  nothing 
(which  is  but  too  grimly  true).  Let  us  suppose  that 
every  dollar  of  his  gross  product  is  required  to  pay  nec- 
essary expenses  of  production,  including  his  living  and 
that  of  his  family.  Working  in  tiiat  condition,  he  is 
out  of  debt  and  owns  his  farm,  so  that  neither  rent  nor 
interest  enter  into  the  calculation.  Now  let  him  lose 
one  crop  and  be  obliged  to  borrow  six  hundred  dollars 
at  seven  per  cent  per  annum.  Immediately  he  must 
fail  liy  fort3^-two  dollars  per  year  to  meet  his  obliga- 
tions. He  must  go  on  borrowing  an  additional  sum  of 
forty-two  dollars  per  year,  and  when  that  with  its  in- 
terest aggregates  more  than  his  farm  will  stand  as  se- 
curity for,  he  goes  into  bankruptcy. 

The  nation's  industries  taken  on  an  average  are  analo- 
gous to  this  farmer  (which,  by  the  way,  is  an  actuality 
and  n  )t  a  creature  of  imagination).  They  have  an  av- 
erage interest  charge  of  three^  and  one-quarter  billions 
to  meet  yearly  and  but  a  billion  and  one-half,  after 
paying  other  expenses,  to  meet  it  with.  These  indus- 
tries borrow  while  they  can  give  security  for  the  loans, 
then  they  fail,  and  we  have  a  panic. 

I  do  not  m(!an  that  the  industries  of  the  country  fail 
as  a  whole.  They  do  not,  for  the  country  is  not  in 
Ijusiness  as  a  whole.  But  enough  ui  the  individuals 
engaged  in  industry  in  the;  country  fail,  so  tiiat  their 
failure  jjroduces  a  ])anic  and  financial  depression.  For 
instance,  A.  ]>,  C,  1)  and  K  represi'ut  the  individuals 
eiigMLced  ill  industrial  pursuits  in  the  United  States.  A 
and  B  gain  three  juid  one-(|uarter  billions  per  year, 
while  C,  I)  and  K  lack  a  l)illioii  mimI  three-quarters  of 
making  ends  meet.  Th*-  eonseciiience  is  that  C,  I)  and 
E  borrow   from  .V   and  B  a   Ijilliun   and   three-quarters 


96  A  BREED  OF  BARREN  METAL 

per  year  while  the  property  of  the  former  remains  suffi- 
cient to  meet  the  loan,  and  when  that  condition  no 
longer  exists,  or  confidence  is  destroyed,  C,  D  and  E 
file  into  bankruptcy  and  A  and  B  possess  themselves 
of  the  goods  and  chatties  of  their  former  business  con- 
freres. C,  D  and  E,  in  nine  cases  out  often,  bankrupt 
by  trying  to  pay  fixed  charges  greater  than  the  produc- 
tivity of  the  business  warrants;  by  trying  to  make  good 
the  fabulous  increase  of  the  barren  dollar  and  the  barren 
wealth  which  it  stands  for.  There  is  nothing  occult 
about  it.  It  is  a  natural  consequence.  Periodical  panic 
and  wholesale  bankruptcy  are  the  legitimate  result  of 
trying  to  apply  false  principles  to  industry. 

It  is  marvelous  that  bearded  sages  should  gaze  in 
mysterious  awe  at  financial  tornadoes  which  sweep  over 
the  interest-collecting  world  with  the  regularity  of  the 
tides,  and  ascribe  them  to  this  or  that  insignificant  local 
cause,  or  shake  their  heads  and  say  that  they  are  neces- 
sary, but  why  they  come  no  one  knows,  when  conditions 
which  must  produce  panic  and  banki'uptcy  are  a 
necessary  concomitant  of  the  foundation  principles 
of  our  financial  and  industrial  system. 

We  assume  in  our  industrial  institutions, that  wealth 
contains  a  natural  principle  or  geometrical  increase. 
We  build  our  financial  and  industrial  systems  on  that 
assumption.  We  lend,  borrow,  trade,  manufacture, 
mine,  railroad,  farm,  upon  that  principle.  We  find 
that  for  the  majority  of  the  people  of  the  nation,  it 
leads  to  disaster  and  distress.  If  we  look  a  little  further, 
we  will  find  the  principle  absolutely  false  and  utterly 
absurd.  Yet  it  works  well  for  some  of  the  people,  the 
people  who  assume  that  as  the  elect  they  have  a  right 
to  live  by  the  labor  of  others,  and  because  they  say  it 
is  well  all  others  believe  it  so. 


CHAPTER   XIV. 

The  Social  Extremes — Why  wealth  accumulates  so  rapidly  in  the  hands  of  a 
few — Is  it  for  ser%'ices  rendered  by  the  rich? — What  they  do  to  serve  the  produc- 
ing masses— The  method  of  accumulating  a  fortune — Explanation  of  the  in- 
crease of  wealth — The  same  in  detail  — Industrial  and  financial  groups — Wliat 
figures  show— How  wealth  is  transferred— The  rapidity  of  the  process- 
Checks. 

''"The  carriage  of  Dives  every  day  throws  the  dust  of  its 
glittering  ivheels  o^er  the  tattered  garments  of  Lazarus.'''' 

The  extremely  rapid  accumulation  of  wealth  in  the 
hands  of  comparatively  few,  is  a  fact  needing  no  proof. 
It  is  a  matter  of  common  observation.  It  may  be 
legitimately  deduced  from  the  census  figures  that  eighty 
per  cent  of  the  wealth  of  the  United  States  belongs  to 
one  two-hundred-and-fortieth  of  the  population,  or  a 
fraction  of  one  per  cent.  Even  after  averaging  results 
so  as  to  make  wealth  appear  as  generally  distributed 
as  may  be,  conservative  sociologists  deduce  from  the 
census  figures  that  seventy-one  per  cent  of  the  wealth 
of  the  country  belongs  to  nine  per  cent  of  the  popula- 
tion. Exact  estimates  are  impossible,  but  really  not 
necessary. 

Within  the  memory  of  men  still  young,  the  million- 
aire was  a  ver}'  unusual  citizen.  Now  he  has  grown  to 
thousands,  and  a  few  of  the  class  count  their  wealth  by 
hundreds  of  millions.  On  the  other  hand,  the  tenant 
farmer  and  the  tenant  occupant  has  grown  with  amaz- 
ing rapidity.  The  number  who  are  classed  as  wage-earn- 
ers, because  they  are  poor,  has  grown  to  include  by  far 
the  greater  portion  of  the  population. 

One  naturally  inquires,  what  is  the  reason  for  all 
this?  Has  the  rich  man  become  more  useful  to  his  fel- 
low man,  that  he  should  tdaim  a  larger  share  of  the 
l)roduce  of  industry?  Not  so  far  as  anyone  is  aware  of. 
Thf;  time  of  the   wealthiest  and  those   whose   fortunes 

i>7 


08      _         A  BREED  OF  BARREN  METAL 

accumulates  the  most  rapidh^,  is  spent  in  traveling 
over  the  world,  sight-seeing,  yacht-racing,  gambling, 
feasting  and  toadying  after  foreign  nobility,  more  idle 
and  useless  than  themselves. 

When  the  millionaire  comes  home,  he  goes  to  work 
planning  and  building  mansions  for  himself,  building 
monuments  for  his  own  aggrandizement,  or  perhaps 
corrupting  politics  if  he  happens  to  have  a  taste  in 
that  direction.  This  is  the  millionaire  of  the  second 
or  later  generations.  His  study  is,  in  short,  how  he  can 
spend  the  most  on  his  own  little,  insignificant  person-, 
and  although  ho  toils  not  neither  does  he  sjiin,  not 
Solomon  in  all  his  glory  fared  like  one  of  these. 

This  millionaire  had  an  ancestor,  a  hard-headed, 
close-fisted,  cunning,  calculating  fellow.  He  (the  an- 
cestor) learned  early  in  life  that  no  great  fortune  could 
ever  be  amassed  in  productive  enterprise;  that  the 
productive  power  of  the  effort  of  one  man  is  very  lim- 
ited in  amount  and  at  best  can  onl}^  give  him  a  com- 
petency. He  also  learned  that  if  one  wishes  to  become 
immensely  rich,  he  must  do  so  by  appropriating  the 
result  of  others'  toil.  He  learned  that  there  are  just 
two  legal  methods  by  which  this  maybe  accomplished: 
(1),  by  appropriating  the  land  which  is  to  be  used  in 
industry  and  charging  laborers  all  that  they  will  pay 
and  still  use  the  land;  (2),  by  controlling  the  wealth 
which  was  to  be  used  in  production  and  charging  for 
its  use  all  that  was  left  after  paying  rent, except  merely 
enough  for  the  laborer  to  live-  on.  While  levying 
these  charges,  to  be  sure,  he  speculated;  i.  e.,  made 
the  rent  and  interest  charges  extraordinarily  large 
wherever  he  could, by  controlling,  at  critical  moments, 
the  land  and  the  capital  of  the  laborers.  Thus  this 
hard-headed  business  man  spent  his  life  in  aj^propriat- 
ing  what  belonged  to  others.  He  laid  a  foundation  by 
which  his  progeny  might  with  greater  ease  continue 
like  operations  for  all  time  to  come.  He  Avas  not  par- 
ticular about  methods,  if  within  the  law.  Wrecked 
properties  and  violated  trusts  too  often  strew  the  way 
of  the  millionaire.  The  enormously  rich  are  not  rich 
by  remuneration  for  their  services  to  fellows,    but   by 


A  BREED  OF  BAKHEN  METAL  99 

taking  all  that  they  can  get  ]>y  any  means  at  hand,  and 
they  find  rent  and  interest  the  most  convenient  means. 

According  to  estimates  made  above,  the  landlord  and 
money-len.ding  class  save  about  two  and  one-half  bil- 
lions per  year.  One  and  one-half  billion  of  this  appears 
as  an  addition  to  national  wealth,  and  another  Ijillion 
is  lent  back  to  business  undertakers  to  tide  them  over 
to  the  day  of  reckoning.  Thus  this  class  would  save 
about  twentj'-five  billions  in  a  decade  and  fifty  billions 
in  twenty  years.  This  fully  accounts  for  the  increase 
of  wealth  in  the  hands  of  the  very  wealthy. 

With  a  surplus  each  j'ear  to  re-invest  and  an  enor- 
mous interest-bearing  capital,  capable  of  absorlnng  all 
possible  production,  a  caste  of  wealth  nnist  soon  l^e 
formed,  almost  absolutely  secure  in  the  possession  of 
their  property.  We  must  have  a  stable  aristocracy 
founded  on  wealth.  That  class  must  in  time  have  ab- 
solute control,  as  it  will  own  all  of  the  wealth.  Inter- 
est will  outrun  the  best  inventive  genius.  The  more 
wealthy  this  class  becomes,  the  greater  the  number  of 
persons  who  will  be  taken  from  productive  occupations 
and  retained  by  the  wealthy  to  attend  to  personal 
wants,  and  the  heavier  will  become  the  burden  on  the 
actual  producers.  Under  the  interest  system  the  ex- 
tremes will  ever  become  more  marked.  But,  to  l)e  more 
specific. 

Following  a  convenient  classification  by  another 
writer,  we  may  divide  the  business  community  into  two 
classes  or  groups:  the  financial  class,  who  engage  their 
talents  in  making  gold  and  silver  breed,  and  the  indus- 
trial class,  who  perform  all  the  work  of  production. 
All  who  h'ud  on  interest  or  use  their  wealth  in  any  way 
to  secure  that  which  is  produced  b}--  another,  without 
parting  with  any  of  that  wealth  in  return,  are  so  far 
memlKTs  of  the  financial  class.  All  who  produce  or  add 
1o  the  sum  total  of  national  wealth  are  so  far  of  the 
industrial  class.  The  financial  class  lives  by  collecting 
rents  and  interest  or  incomes  founded  on  these  charges. 
The  industrial  class  pays  all  rent  and  interest,  as  well 
as  all  other  charges  earned  or  unearned.  Rent  and 
interest  are  usually  secured   by  liens  on  i)rojierty,   and 


100  A  BREED  OF  BARREN  METAL 

must,  usually,  be  paid.  Hence  the  financial  group, 
except  in. a  small  percentage  of  cases,  receives  its  «hare 
of  the  product,  and  if  any  default  is  made,  it  is  in  the 
necessary  expenses  of  production,  due  to  members  of 
the  industrial  group.  Default  can  be  made  only  in  the 
payment  of  obligations  between  members  of  the  indus- 
trial class.  That  is,  members  of  the  industrial  class 
must  bear  all  loss. 

Thus,  while  each  year  sees  thousands  of  the  members 
of  the  industrial  group  go  by  the  board  and  turn  their 
effects  over  to  the  financial  group  to  satisfy  fixed 
charges,  the  members  of  the  financial  group  lose  littl<; 
and  grow  constantly  richer.  While  industry  pays,  they 
receive  their  increase;  when  industry  fails,  they  receive 
both  increase  and  principal. 

There  are  certain  beasts  of  prey  which  fatten  by  the 
misfortunes  of  their  brother  animals.  There  is  a  class 
of  non-combatants  who  follow  in  the  wake  of  fighting 
men  and  fatten  on  the  spoils  of  the  fray.  They  keep 
out  of  danger,  skulking  in  the  rear  until  the  battle  is 
fought,  and  when  others  are  wrapped  up  in  alleviating 
the  sufferings  of  the  unfortunate,  they  swoop  down 
upon  the  wreck-strewn  field  and  gather  up  the  spoil. 
That  is  the  position  of  a  large  number  of  the  camp  fol- 
lowers of  the  peace  arm}',  and  whether  the  hosts  meet 
with  success  or  reverses,  whether  there  is  panic  or  pros- 
perity, they  reap  a  harvest.  They  are  sure  to  avoid 
danger.  During  prosperity,  they  sow  the  seeds  of  dis- 
aster for  others.  When  disaster  ripens  they  get  the 
corn,  the  toilers  the  tares.     Interest  is  the  winnower. 

The  rent  and  interest  charges  of  three  and  one-half 
billions  are  about  two  billions  more  than  can  be  met 
annually  after  paying  necessary  expenses  of  production, 
but,  as  rent  and  interest  must  be  met,  the  members  of 
the  industrial  group  who  fail  to  otherwise  meet  them 
are  forced  to  bankruptcy  or  to  borrow  back  a  portion  of 
the  rent  and  interest  fund  in  order  to  meet  current  ex- 
penses. For  the  wealth  which  has  passed  to  the  finan- 
cial group  is  the  only  fund  to  borrow  from  except  the 
half  a  million  or  so  saved  from  the  wages  of  labor  and 
superintendence.     The  financial  grouj)  lends  only   on 


A  BREED  OF  BARREN  METAL  101 

security,  and  the  wealth  necessary  each  year  to  pay 
current  expenses  can  be  secured  by  the  delinquents  in 
the  industrial  group  only  by  hypothecating  each  year 
an  additional  amount  of  their  fixed  capital  to  the  mem- 
bers of  the  former  group.  It  amounts, really,  to  an  assign- 
ing a  portion  of  the  fixed  capital  of  the  industrial 
group.  Three-fourths  of  the  net  yearly  increase  of  na- 
tional wealth  accumulates  on  the  hands  of  the  financial 
group  and,  before  it  can  be  used  in  production,  must 
be  returned  to  the  industrial  group,  A  half  million 
is  saved  in  the  industrial  group,  and  if  this  is  lent  it 
makes  its  possessors  just  so  far  members  of  the  finan- 
cial group,  and  begins  a  transfer  of  ]3roperty  from  the 
less  fortunate  to  the  more  successful  members  of  the 
group  of  workers.  In  this  way  about  two  and  one-half 
billions  yearly  of  fixed  capital  passes  from  toilers, 
who  constitute  the  members  of  the  industrial  group,  to' 
the  money  lenders,  or  financiers,  as  they  are  pumpoiisly 
stylefl.  Tliis  is  sufficient  fully  to  account  for  the  rapid 
accumulation  of  wealth  in  the  hands  of  the  few  and  the 
consequent  impoverishment  of  the  many.  The  change 
is  much  more  rapid  than  would  be  indicated  by  the 
absorbing  by  the  financial  group  of  all  the  yearly  in- 
crease of  national  wealth. 

This  assigning  of  fixed  capital  has  but  one  result: 
final  bankruptcy.  It  must  constantly  cripple  the  busi- 
ness of  the  undertaker  and  cut  down  his  income,  fi 
he  could  not  meet  smaller  expenses  with  a  larger  in- 
come, he  cannot  be  expected  to  meet  larger  expenses 
with  a  smaller  inconle.  He  finally  goes  to  the  wall  and 
the  financial  group  gets  all  of  his  property.  This  will 
o.-cur  as  soon  as  he  fails  to  meet  obligations  or  obliga- 
lions  become  so  large  as  to  make  the  security  doubtful, 
Mhd  will,  of  course,  make  congestion  of  Avealth  more 
r;i|)i(l. 

While  it  is  not  proliablc  tJiat  those  who  receive  in- 
comeH  from  rent  and  interest, six-nd  from  those  incomes 
more  than  a  billion  annually,  such  income  amounts 
lo  three  und  one-luilf  times  that  sum.  Hut  about  a 
liillion  and  one-hall'  of  this  appears  yearly  in  the  incre- 
ment of  national  wealth  and  the  remainder  must  repre- 


102  A  BKEED  OF  BARREN  METAL 

sent  what  is  re-loaned  to  the  unsuccessful  to  pay 
current  expenses  of  production.  This  sum  gradual!}^ 
gives  the  financial  group  control  of  the  fixed  capital 
already  in  existence,  as  well  as  most  of  the  increase. 
The  financial  group  thus  becomes  rich  more  rapidly 
than  the  nation  at  large;  and  national  increase  in 
wealth  may  not  mean  prosperity  of  the  producing 
masses.  That  is  the  fact.  The  financial  group  can  be 
prosperous,  while  they  exact  tribute  from  the  masses 
as  large  as  business  will  bear. 

To  be  sure,  the  classes  are  not  rigidly  fixed.  A  few 
drop,  each  year,  from  the  financial  group  into  the  in- 
dustrial group, a  few  go  from  the  industrial  to  the  finan- 
cial; but  that  neither  makes  richer  those  who  are  left 
in  the  one  nor  poorer  those  who  remain  in  the  other. 
Many  individuals  are  members  of  both  grpups,  but  as 
members  of  the  financial  group  they  get  their  incomes 
from  the  industrials  other  than  themselves,  and  thus 
their  double  relation  makes  no  easier  the  lot  of  the  in- 
dustrials who  are  not  also  financiers,  but  the  oj^posite. 
They  do  make  it  appear  that  they  have  earned  their 
wea  til  as  industrials,  and  make  it  difficult  physically 
to  separate  the  non-producing  from  the  producing 
classes. 

England  is  sometimes  cited  as  an  instance  of  de-cen- 
tralization of  wealth.  It  is  held  that  in  England  wealth 
is  now  more  generally  distributed  than  ever  before, and 
this  is  supposed  to  prove  that  there  is  no  danger  of  un- 
due centralization  of  wealth.  But  conditions  in  Eng- 
land prove  nothing  as  to  other  nations.  England  is 
the  loan-shop  of  the  world,  and  her  interest  tribute  is 
levied  on  the  whole  world  beside.  Three-fourths  of 
the  citizens  of  England  may  become  rich  by  interest- 
taking  and  yet  not  receive  a  dollar  from  a  citizen  of  the 
island.  English  wealth  is  produced  abroad.  Even 
though  the  facts  are  correct,  the  conclusion  of  the 
apologist  is  not  warranted. 

But,  it  is  said,  large  fortunes  are  not  made  by  inter- 
est-taking, but  are  amassed  by  speculation.  The  prin- 
ciple is  exactly  the  same.  It  is  the  application  of  the 
idea  of  taking  all  that  one  can  extort  by  any  means  by 


A  BREED  OF  BARREN  METAL  103 

which  it  can  be  extorted,  on  the  assumption  that  some- 
how his  acts  have  created  what  he  takes.  The  rate  is 
larger  in  speculation,  but  the  jDlunger  loses  so  often, 
the  business  is  so  uncertain,  that  it  does  not  begin  to 
be  as  profitable  as  interest-taking.  When  great  for- 
tunes are  amassed,  speculation  is  discarded  altogether 
and  interest-taking  is  used  as  a  means  of  perpetuating 
the  fortune.  Then  interest-taking,  and  a  currency 
suited  to  that  purpose,are  the  instruments  which  make 
speculation  possible.  It  is  by  manipulating  currency 
through  the  power  of  interest-taking  that  prices  are 
speculatively  affected  and  all  speculative  business  car- 
ried on.  Destroying  interest-taking  would  destroy  spec- 
ulation and  thus  do  the  country  a  service  of  inestimable 
value.  The  business  of  the  speculator  is  appropriating, 
not  ])roducing.and  he  and  his  are  a  dead  weight  on  the 
shoulders  of  the  productive  toiler.  He  gives  absolutely 
no  return  for  what  he  gets. 


CHAPTER  XV. 

Extreme  Poverty— What  the  interest-taker  demands— What  he  receives— Its 
eifect  on  the  toiler— The  yearly  product  limited — No  way  of  increasing  the 
share  of  the  laborer  without  diminishing  the  share  of  some  one  else — How 
limited  in  quantity  the  product  is — Make  producers  of  non-producers. 

^^  The  poor  ye  have  always  with  you.'' 

On  the  other  hand,  we  have  abject  poverty  on  the 
part  of  a  large  percentage  of  the  producing  masses. 
This  is  a  necessary  result  of  one  class  being  immensely 
wealthy.  They  are  immensely  wealthy  because  they 
take  what  rightfully  belongs  to  others,  and  these  others 
are  poor  because  their  substance  is  taken  fi'ora  them 
and  no  return  given  for  it. 

As  we  have  seen  above,  the  taker  of  rent  and  interest 
gets  all  that  he  bargains  for,  and  he  bargains  for  enough 
to  make  him  a  millionaire  and  his  victim  a  pauper.  A 
man  with  one  hundred  thousand  dollars  lent  on  farm 
mortgages,  can  spend  the  average  income  of  seventeen 
farmers  and  at  the  same  time  save  the  average  income 
of  ten  farmers.  Thus  he  may  spend  each  year  the  sal- 
ary of  one  of  our  congressmen  and  save  sufficient  to  die 
worth  two  hundred  thousand,  so  that  his  son  may  save 
twice  as  much  and  spend  twice  as  much  as  he,  without 
ever  doing'the  slightest  service  to  any  one  else  on  earth. 
Thus  his  posterity  may  become  richer  and  more  extrav- 
agant. The  further  they  become  removed  from  those 
who  have  done  something  useful,  the  more  they  can 
collect  for  idleness.  Put  at  interest  at  five  per  cent, 
one  hundred  thousand  dollars  will  double  itself  in  four- 
teen years;  at  six  per  cent  it  will  double  in  twelve 
years;  at  seven  per  cent  in  ten  years;  at  eight  per  cent 
in  nine  years.  This  is  much  more  rapidly  than  fixed 
capital  'ian  accumulate,  and  an  attempt  to  carry  out 
such  accumulation  compels  a  large  percentage  of  the 
population  to  subsist  on  short  rations. 

104 


A  BREED  OF  BARREN  METAL  105 

As  was  showu  above,  there  is  a  limited  gross  income 
to  be  divided  between  the  hmdlord,  capitalist  and  la- 
borer. It"  any  one  gets  more  than  his  share  the  others 
must  get  less.  But  how  very  limited  this  income  is, 
but  few  realize.  If  every  cent  that  is  left  after  repair- 
ing the  annual  deterioration  of  wealth,  were  given  to 
the  toiler,  he  would  receive  leas  than  five  hundred  dol- 
lars per  year.  If  the  product  were  distributed  equally 
between  the  inhabitants,  men,  women  and  children, 
each  would  have  but  about  one  hundred  and  eighty-five 
dollars  to  live  on.  Toilers  cannot  atford  to  share  their 
meager  income  with  idlers.  The  only  way  to  increase 
wages  and  do  away  with  abject  poverty  among  ]n'o- 
ducers,  is  to  turn  the  rent  and  interest  charges  into  the 
wage  fund.  If  non-producers  get  three  and  one-half 
billions  of  dollars  per  annum,  producers  get  just  that 
much  less  than  their  share.  When  we  consider  that 
the  whole  product,  besides  enough  to  keep  up  capital, 
is  barely  sufficient  to  keep  the  workers,  it  is  not  diffi- 
cult to  see  why  some  persons  want. 

I  am  aware  that  these  facts  are  used  by  a  few  weak- 
minded  individuals  to  support  the  taking  of  rent  and 
interest.  They  tell  us,  with  sublime  simplicity,  that 
this  charge  does  not  amount  to  enough  to  make  any 
dilference  in  the  wages  of  the  laborer,  and  show  how 
little  he  would  get  if  he  were  to  get  it  all.  It  would 
increase  iiis  wages  by  at  least  fifty  per  cent. 

Wealth  is  produced  by  labor  alone,  and  the  only  way 
to  increase  the  product  and  consequently  the  wages  or 
share  of  the  producers,  is  to  nuike  non-producers  work 
productively.  This  can  I)e  done  only  by  depriving  them 
of  thf'ir  ability  to  appropriate  a  portion  of  the  wealth 
l)rf)duced  \)y  others.  For,  while  one  can  live  better  by 
idleness,   he  will  not  prcjduce. 

If  present  non-|)ro(lu('i'rs  became  producers,  several 
consequences  would  follow. The  family  of  non-produ(*ers, 
who  now  spend  one  hundred  thousand  dollars  annually, 
necessarily  make  one  hundred  toilers  or  more  non-produ- 
cers, in  so  far  as  other  toilers  are  concerned.  All  that  a 
non-producer  or  any  of  liis  servants  consumes  is  con- 
sumed non-produc;tively,  so  far  as  the  toiler  is  concerned. 


10()  A    BREED    OF    BARREN    METAL 

The  horses  which  the  non-producer  uses,  the  man  who 
cares  for  these  horses,  the  man  who  produces  feed  for 
these  horses,  the  man  who  feeds  the  man  who  produces 
feed  for  these  horses,  are  all  non-productive  workers, 
in  their  relation  to  producing  classes.  What  they  do 
in  no  way  aids  any  one  who  toils.  For  all  this  effort, 
all  the  product  represented  by  the  one  hundred  thou- 
sand dollars  consumed  yearly,  is  devoted  to  one  object 
and  but  one  alone:  supplying  the  wants  of  one  who 
does  nothing  to  supply  the  wants  of  others.  Industri- 
ally, it  is  a  total  loss.  So  far  as  toilers  are  concerned, 
except  those  actually  working  for  the  idler,  it  may  as 
well  have  been  burned  on  the  spot  on  which  it  was  pro- 
duced, the  only  difference  being  that  the  loss  would 
fall  on  different  individuals  among  the  toiling  masses. 

If  that  one  hundred  thousand  dollars  were  spent  by 
producers  instead  of  non-producers,  it  would  make  the 
former  just  that  much  better  off,  for  every  dollar  would 
command  a  dollar  in  some  other  sort  of  service.  The 
labor  which  that  fortune  now  hires  for  the  non-pro- 
ducer would  be  engaged  in  creating  things  to  supply 
the  wants  of  the  producer.  The  coachman  might  be 
making  shoes  for  toiling  feet;  the  butler  planting  corn; 
the  groom  raising  beef;  the  farmers  who  supplied  the 
larder  and  stables  supplying  the  toilers  with  bread. 
The  non-producer,turned  into  a  useful  citizen,  might  be 
at  the  forge  or  lathe  or  counter,  hel])ing  to  increase  the 
stock  of  wealth.  At  worst  he  could  but  go  to  the  asylum 
for  the  feeble  and  could  be  supported  at  a  trifling  per- 
centage of  his  present  living. 

The  painter  of  daubs  for  the  non-producing  patron, 
might  be  applying  a  more  useful  brush  to  a  house  or  barn 
to  preserve  it  from  decay;  or  if  he  was,  perchance,  an 
artist  of  real  talent,  he  might  be  creating  works  of  art 
for  the  edification  of  those  Avho  formerly  furnished  the 
wealth  to  pay  for  the  pictures  which  the  non-producer 
haughtily  called  his  own. 

To  illustrate:  let  us  suppose  that  five  men  engage  in 
five  branches  of  trade;  one  producing  bread  and  drink, 
one  meat,  one  clothing,  one  tools  and  machinery,  one 
carrying  these  things  from   each  to  each,   and  a  sixth 


A  BREED  OF  BARREN  METAL  107 

partner  laboring  to  supply  the  {esthetic  and  intellect- 
ual wants  of  the  community.  Each  produces  what  the 
other  wants,  and  each  adds  to  the  wealth  of  all.  Now 
let  an  outsider  come  who  controls  the  land  and  the 
capital  which  these  men  require,  and  compel  each  toiler 
to  give  him  a  portion  of  what  that  toiler  produces,  as 
well  as  to  spend  a  portion  of  each  day  producing  some- 
thing which  none  of  the  toilers  use, but  which  the  land- 
lord and  capitalist  wants  for  himself.  Of  course  the 
latter  dignitary  does  not  deign  to  produce  anything.  It 
is  enough  for  him  to  attend  to  his  "business;"  i.  e., 
hatch  schemes  for  taking  a  portion  of  what  is  produced 
by  those  who  work.  It  is  evident  that  the  time  con- 
>iumed  in  producing  what  is  given  to  the  capitalist  is 
time  thrown  away,  so  far  as  the  toilers  are  concerned, 
for  some  one  else  gets  the  benefit  of  that  labor  and  re- 
turns nothing  for  it.  If  that  time  were  devoted  to  pro- 
ducing what  the  toilers  used  it  would  make  them  that 
much  better  otf.  It  is  a  case  exactly  parallel  to  that 
of  the  toilers  of  the  nation.  By  destroying  unearned 
incfjmes,  we  must  make  all  toilers,  and  make  the  effort 
of  each  add  to  the  wealth  of  all.  This  is  the  only  way 
to  relieve  distress.  Our  failure  to  do  this  fully  accounts 
for  the  abject  poverty  of  many  of  those  who  toil. 


CHAPTER   XVI. 

Improved  Machinery — Its  failure  to  ameliorate  the  condition  of  the  laborer- 
Wages  now  and  in  1450— The  increased  producing  power  of  the  laborer— Why 
does  he  not  get  the  benefit  of  this  power? — Interest-taking  is  to  blame— The  de- 
mands of  interest  increase  geometrically,  producing  power  does  not— Capital- 
ists take  all  increase — The  inventor  not  rewarded — Men  are  thrown  out  of 
employment,  and  competition  keeps  wages  down  so  that  the  capitalist  can  take 
all  increase. 

"/i  is  doubtful  whether  improved  machinery  has  lightened 
the  burden  of  any  toiling  hitman.''^ 

The  invention  of  labor  saving  machinery. 

Improved  machinery  has  failed  to  ameliorate  the  con- 
dition of  the  toiler  in  a  degree  at  all  commensurate 
with  the  increased  producing  power  thus  given  to  the 
laborer.  Thorold  Rogers,*  a  recognized  authority  on 
this  subject,  states  that  the  labor  of  Englishmen  in 
obtaining  the  necessaries  of  life  was  as  effective  four  and 
one-half  centuries  ago  as  it  is  to-day.  Even  more  so. 
Yet  there  is  scarcely  an  occupation  at  which  a  laborer 
cannot  accomplish  many  times  as  much  in  the  produc- 
tion of  wealth  as  he  could  even  a  century  ago.  What 
becomes  of  the  surplus?  As  Mr.  Rogers  shows,  the 
laborer  gets  but  a  small  part  of  it  in  wages.  Govern- 
ment, to  be  sure,  is  a  little  more  expensive,  but  that 
does  not  begin  to  account  for  it.  There  is  but  one  other 
place  to  which  it  can  go:  as  unearned  income  to  the 
landlord  and  the  usurer. 

Instance  the  one  occupation  of  agriculturist  With 
the  gang  plow,  the  seeder,  the  horse  rake,  the  sulky 
cultivator,  the  horse-fork,  the  self-binder  and  the  power 
thresher,  one  man  can  accomplish  the  former  work 
of  at  least  half  a  dozen.  Has  he  half  a  dozen  times  as 
much  wealth  at  his  disposal  each  year?  Not  at  all. 
Unless  he  lives  well  nigh  as  primitively  as  he  did  three- 

*Work  and  Wages— 539-541  et  seq. 

108 


A  BREED  OF  BARREN  METAL'  109 

quarters  of  a  century  ago,  he  cannot  make  ends  meet. 
People  say  he  is  extravagant,  his  family  want  comforts 
which  their  grandmothers  did  not  have,  hence  he  is  not 
prosperous.  These  critics  scarcely  realize  that  the 
prodigal  luxury  of  the  farmer  is  held  within  the  bounds 
of  three  hundred  dollars  per  year,  while  the  critics 
groan  because  they  are  limited  to  from  twenty  to  forty 
times  that  amount.  And  the  farmer  is  not  an  excep- 
tion in  this  respect.  The  man  who  b}''  use  of  the  ma- 
chine makes  half  a  dozen  pairs  of  shoes  where  one  could 
be  made  a  century  ago,  or  ten  yards  of  cloth  to  one 
made  by  his  father, or  ten  tons  of  iron  as  readily  as  one 
could  formerly  be  made;  or  carries  a  ton  of  produce  ten 
miles  as  cheaply  as  it  could  formerly  be  carried  a  mile, 
receives  little  more  real  wages  than  his  fathers  did.  To 
be  sure,  the  laborer  of  to-day  has  things  which  even  the 
wealthy  could  not  have  a  few  years  ago,  but  for  the 
substantial  necessities  of  life  he  is  but  little  better  off. 
His  environment  compels  him  to  live  on  a  different 
scale  from  that  of  the  past.  It  makes  necessities  to- 
day of  the  luxuries  of  former  days,  so  that  what  he 
must  have  presses  as  closely  as  ever  to  the  limit  of  his 
income.  And  as  compared  with  the  wealthy,the  laborer 
of  to-day  is  infinitely  poorer  than  his  laboring  ancestors 
were.  The  effect  of  machinery  has  so  far  been  the  piling 
up  of  large  fortunes,  rather  than  lightening  the  burdens 
of  toil. 

It  is  all  due  to  the  principle  of  interest-taking.  The 
march  of  machinery  has  not  increased  net  pToduction 
in  a  geometrical  ratio.  Interest  demands  the  geomet- 
ric increase  of  product  to  keep  pace  with  its  demands. 
Interest  was  and  is  charged,  as  we  have  seen,  on  nearly 
all  ca])ital  used  in  production,  directly  or  indirectly. 
Inte^(^st-takers,  therefore,  control  all  of  the  ])r()duct 
and  claim  all  that  is  left  after  giving  the  majority  of 
laborers  a  mere  living. 

We  will  suppose  that  a  man  is  able  by  his  toil  with 
the  implements  of  three-quarters  of  a  century  ago,  to 
secure  a  living  for  himself  and  his  family.  .Such  was 
the  fact.  He  owned  his  farm  or  sho|)  and  retained 
nearly  the  whole  value  of  his   product.     Tln'    inventor 


no  A  BREED  OF  BARREN  METAL 

came,  with  his  improved  processes.  A  business  man 
adopted  it  and  loaned  it  to  the  farmer  or  mechanic, 
with  the  understanding  that  the  lender  should  have  the 
lion's  share  of  the  product.  The  contract  is  carried  out. 
The  lion's  share  of  the  product  goes  to  the  lender  in  in- 
terest and  is  re-lent  to  bear  interest;  the  charges 
which  the  mechanic  has  to  meet  multiply  and  he  finds 
that  he  still  has  left  barely  enough  to  support  his  fam- 
ily. But  the  lender  has  also  enough  to  support  his 
family,  and  to  support  it  on  a  scale  of  which  the  me- 
chanic never  dreamed.  Thus  it  went  with  every  inven- 
tion. It  was  controlled  as  capital,  lent,  and  the 
increased  effectiveness  went  largely  to  idlers,  under  the 
laws  of  rent  and  interest. 

The  inventors  even,  as  a  rule,  get  little  of  the  benefit 
of  the  fecundity  of  their  ideas  in  the  world  of  industry. 
They,  as  a  class,  die  poor.  It  is  the  man  with  the  cap- 
ital which  is  assumed  to  grow,  who  is  lord  of  creation 
and  for  whom  all  other  men  toil.  He  is  the  interest 
baron,  the  collector  of  increase  on  decaying  wealth ! 

Then,  in  the  manufacturing  industries,  the  increased 
use  of  machinery  tends  to  throw  the  laborer  out  of  em- 
ployment and  fill  the  labor  market  with  men  eagerly 
competing  for  places.  The  capitalist  can  run  his  busi- 
ness with  fewer  hands.  The  competition  of  wage- 
earners  becomes  more  fierce.  Those  who  can  secure 
places  do  not  dare  to  ask  for  more  than  they  were  re- 
ceiving when  laboring  with  poorer  mechanical  appli- 
ances, for  there  are  many  to  take  their  places  at  such 
a  wage.  As  a  result  the  capitalist  gets  the  whole  benefit 
of  the  increased  effectiveness  of  the  machinery.  It  is 
paid  in  interest,  rent  and  capital  profits,  which  diff'er 
in  no  way  from  interest.  The  effectiveness  of  inven- 
tion, under  the  system  of  interest-taking,  accrues  to 
him  who  controls  the  material  of  which  the  machine  is 
made.  While  interest  and  capital  profits  are  collected, 
invention  must  have  the  immediate  elTect  of  decreasing 
wages,  and  making  fewer  bear  the  burdens  of  produc- 
tive toil. 


CHAPTER    XVII. 

The  Large  Salaries  of  Non-Producers — How  accounted  for — Tlie  limit  of 
tangible  production — The  wages  of  superintendents— Measure  of  reinuutr- 
ation — The  principle  that  one  has  a  right  to  all  that  he  can  get — The  measure  of 
remuneration  thereunder — Brain  work — The  standpoint  of  tlie  discussion — 
The  great  money-getter — Remuneration  for  mental  and  physical  exertion — 
The  lawyer— The  doctor — The  literary  man — Works  of  art—The  inventor — The 
range  of  talent — Ability — What  is-the  source  of  large  incomes — Are  the  people 
interested  in  the  size  of  salaries  of  private  coporation  officials? — Wealth  and 
its  responsibilities. 

What  one  relinquishes^  not  what  one  can  extort,  is  the 
measure  of  his  service. 

Non-producers  have  much  larger  incomes  than  pro- 
ducers. In  fact,  one's  income  is  often  in  inverse  ratio 
to  the  service  which  he  does  his  fellow  men.  This  fact 
cannot  be  accounted  for  on  the  theory  that  every  man 
should  be  Tewarded  according  to  his  services,  or  that 
each  should  have  what  he  produces  and  that  alone.  It 
must  be  accounted  for  in  some  other  way. 

As  for  tangible  material  production  or  value  of  ser- 
vices, seven  hundred  dollars  per  year  is  the  utmost 
average  limit  to  human  power,  and  as  one-third  of  this 
is  eaten  up  in  repairing  the  natural  decay  of  capital, 
less  than  five  hundred  dollars  per  year  is  left  for  the 
wage  of  the  average  toiler.*  Men  may  sometime  becom(» 
morepotent  producers, they  are  becoming  so  each  day,  but 
the  above  is  the  limit  reached  with  the  present  quality 
of  land  and  machinery.     There  is  a  difference  in  indi- 

•This,  to  be  sure,  is  but  an  average  at  best,  but  it  is  not  far  from  tlie  mark. 
There  are  probably  twenty  five  millions  of  persons,  including  women  who  take 
care  of  homes  and  children,  in  gainful  occupations.  The  yearly  gross  product 
is  not  more  than  fifteen  billions,  and  this  would  be  a  product  of  but  six  hundred 
dollars  for  each  worker.  It  would  take  a  product  of  twenty  billions  a  year  pro- 
duced by  twenty  million  toilers  to  bring  indiviilual  proiluct  up  to  one  thousand 
per  year,  the  figure  adopted  by  Mr  Atkinson.  On  the  other  h.md,  there  are 
many  returned  in  census  reports  as  being  engaged  in  gainful  occupation,  who 
never  add  a  iloUar's  worth  to  the  wealth  of  llie  coMnnunity.tiiid  there  is  no  way  of 
re-eslimaling  the  number  of  this  class.  Hence  an  tstimate  of  avei  ag(; /■•;■  A1///11 
product  is  more  or  less  a  guess,  but  I  think  I  have;  put  the  figure  high  enough. 
Even  at  one  thousand  dollars,  the /cr  rrt/»;Vrt  yearly  product  could  not  account. 
for  yearly  salaries. 

m 


112  A  BREED  OF  BARREN  METAL 

vidnals.  Counting  extremes,  there  is  a  wide  difference 
in  the  ability  of  individuals  to  produce.  But  that  differ- 
ence does  not  begin  to  account  for  the  difference  in 
wages.  The  largest  giant  is  scarcely  twice  as  tall  as 
the  smallest  dwarf.  Just  so  the  most  prolific  worker 
can  scarcely  produce  twice  as  much  as  the  most  ineffect- 
ual producer,  in  full  health  and  vigor.  Yet  the  yearly 
income  in  one  case  is  often  one  hundred  times  that  of 
the  other,  or  even  much  greater. 

The  wages  of  superintendents  should  be  only  as  much 
greater  than  those  of  the  producing  rank  and  file  as  the 
ability  of  the  superintendent  could  increase  the 
product  of  those  whose  labor  he  is  directing,  beyond 
the  limit  which  could  be  reached  under  the  direction  of 
any  person  within  the  rank  and  file  of  the  producers. 
Experience  teaches  us  that  talents  do  not  differ  greatly 
in  the  same  class,  and  that  in  any  large  body  of  workers 
there  may  be  found  several  who  could  do  quite  as  well 
as  superintendent  as  the  person  who  actually  holds  the 
position.  This  is  verified  every  day  by  promotions  from 
the  rank  and  file  to  the  superintendence  and  manage- 
ment in  all  branches  of  affairs,  public  and  private. 

Then,  either  on  a  competitive  basis  or  as  a  return  for 
actual  services,  the  wages  of  superintendents  should 
be  little  if  any  above  the  wages  of  the  best  workers 
whom  they  direct,  and  not  very  much  above  the  aver- 
age. The  facts  are  largely  in  accordance  with  this  where 
the  superintendent  is  a  mere  hired  foreman  and  does 
not  include  in  his  remuneration,  capital  profits  of  some 
sort. 

Then  the  pay  of  the  actual  toiler  or  the  toiler  of  su- 
perintendence, based  on  tangible  product,  cannot  be 
rightly  much  above  the  limit  of  the  tangible  average 
production  of  one  individual.  This  would  hold  the 
maximum  salary  down  to  about  one  hundred  dollars 
per  month. 

But  with  the  principle  admitted  that  one  has  a  right 
to  take  as  much  as  he  can  get,  and  to  get  as  much  as 
he  can  by  any  means  at  his  disposal,  whether  it  has 
been  produced  by  himself  or  others,  there  is  no  limit  to 
what  one  may   take  as  income,  or,  more  accurately,  it 


A  BREED  OF  BARREN  METAL  118 

is  limited  only  by  what  he  has  taken  already.  The  cap- 
italist, with  one  hundred  thousand  dollars,  can  levy 
tribute  on  one  hundred  laborers,  and  take  from  eighty 
to  one  hundred  dollars  per  year  from  each,  giving  him 
an  income  princely  as  compared  with  the  incomes  for 
these  laborers.  He  can  aftord  to  pay  a  non-producing 
lawyer  two  thousand  dollars  per  year  to  do  this  for 
him,  so  that  the  man  with  capital  need  not  turn  his 
hand,  and  still  he  will  have  a  goodly  net  income.  The 
capitalist  with  a  million  can  pay  ten  times  as  much  to 
a  parasite  of  the  law  to  financier  for  him  and  still  live 
like  a  prince  on  the  tribute  exacted  from  toil.  Under 
the  law  of  interest,  the  wages  of  idleness  may  be  any 
sum  falling  short  of  the  gross  product  minus  the  cost 
of  an  indillerent  living  to  the  majority  of  producers, 
while  the  wages  of  toil  is  rigidly  fixed  at  a  most  moder- 
ate allowance. 

But,  say  the  apologists,  these  men  are  paid  for  Ijruin 
work.  So  is  the  cracksman  who  loots  their  safes,  but 
it  is  brain  work  of  the  sort  which  should  not  be  encour- 
aged. It  is  the  human  intellect  directed  to  the  prob- 
lem :  "'How  much  can  I  take  from  others  without  giving 
aught  in  return?"  Mental  labor  should  have  its  reward. 
The  man  who  invents  a  useful  machine;  the  man  wlio 
subdues  a  natural  force  to  the  use  of  man;  the  man  who 
stirs  the  souls  of  men  with  noble  thoughts,  inspires  the 
living  glories  of  the  magic  canvas,  or  the  glowing  life 
of  the  chiseled  marble,  is  a  public  benefactor,  deserv- 
ing of  substantial  reward.  But  does  the  capitalist  claim 
remuneration  for  any  of  these  acts  Not  at  all.  His 
remuneration  comes  from  the  exercise  of  that  stealthy, 
cat-like  cunning  which  in  the  days  of  force  enabled 
primitive  man  t<j  steal  upon  his  fellows, grasp  a  momen- 
tary advantage,  and  carry  olf  i)roperty  after  wasting 
life.  He  takes  becausi'  his  wenllh  givrs  him  the  ])ower 
to  do  so. 

That  th<'  bi'ain  work  of  the  Ijenefactors  of  the  race 
should  be  remuneratetl  is  no  reason  why  the  able  law- 
yer, who  uses  his  God-given  intellect  to  pervert  the 
laws  which  lie  has  sworn  to  support,  in  order  that  a 
great  corporation  or  a  petty  thief  may  take  from  others 


114  A  BREED  OF  BARKEN  METAL 

wJiat  their  toil  has  produced,  should  be  looked  upon 
MS  a  benefactor  or  receive,  from  the  very  people  whom 
he  labored. to  injure,  a  princely  remuneration  for  his 
treasonable  iniquity. 

I  am  discussing  this  question  from  the  standpoint  of 
the  real  producer,  from  the  standpoint  of  the  greatest 
good  to  the  greatest  number.  Ninety  per  cent  of  the 
people  have  no  interest  in  supporting  the  pretensions 
of  the  other  ten  per  cent,  who  assume  a  superiority  to 
their  fellow  beings  and  think  that  somehow  they  (the 
wealthy)  were  divinely  commissioned  to  enjoy  all  of 
the  good  things  of  this  life  at  whatever  cost  to  the  re- 
mainder. The  standpoint  of  the  producing  toiler  is  the 
only  standpoint  from  which  any  honest  economist  can 
look  at  the  subject.  Either  men  have  equal  rights  to 
what  they  produce,  or  they  have  not.  If  they  have  not 
some  men  must  be  naturally  or  divinely  delegated  to 
rule  over  their  fellows  and  appropriate  what  they 
choose.  The  appropriator,  in  a  state  like  this,  must 
be  the  judge,  for  there  are  none  other.  Might  is  right 
and  cunning  might.  There  is  no  limit  to  extortion, 
ethics  is  but  a  myth  and  economics  the  mutterings  of 
fools.  The  people  must  take  thankfully  what  their  lords 
and  masters  give  them.  There  is  no  middle  ground. 
One  must  either  accept  the  foregoing  or  admit  that 
men  have  equal  rights  in  all  things,  and  base  his  eco- 
nomic philosophy  on  this  principle.  On  the  principles 
of  equal  rights  of  man,  I  hold  that  because  intellect 
applied  to  the  aid  of  toilers  should  be  rewarded,  is  no 
reason  why  intellect  applied  to  despoiling  toilers  should 
be  rewarded. 

The  great  money-getter  may  work  hard,  have  anxious 
nights  and  sleepless  days,  but  if  that  toil  and  anxiety 
is  directed  to  wrecking  a  railroad  that  he  ma}''  gather  a 
fortune  from  the  ruins,  his  toil  should  receive  the  meed 
of  the  criminal,  not  the  reward  of  a  productive  laborer. 
Is  his  toil  directed  to  getting  wealth  for  himself  at  the 
expense  of  others,  or  for  others  to  whom  it  does  not  be- 
long that  he  may  share  the  plunder,  or  is  it  directed  to 
wresting  from  nature  wealth  for  the  benefit  of  all, him- 
self included?     On  the  answer  to  this  question  depends 


A  BREED  OF  BARREN  METAL  115 

whether  the  mental  or  physiczxl  effort  of  this  or  that 
particular  person  is  rightfully  entitled  to  remuneration. 
And  it  applies  to  the  lawyer  or  the  bank  president  or 
the  railway  financier  as  well  as  to  the  cracksman  or 
sneak  thief. 

As  to  the  relative  amount  of  remuneration  which 
mental  and  physical  effort  should  control,  where  both 
are  productively  employed,  the  present  practice  seems 
to  be  based  on  dubious  grounds,  to  say  the  least.  We 
assume  that  mental  effort  is  worthy  of  greater  remuner- 
ation than  is  physical,  but  if  required  to  give  a  valid 
reason  for  such  assumption,  we  would  not  find  our  way 
at  all  easy  Mental  ability  is  its  own  reward  to  a  greater 
extent  than  is  physical,  and  mental  effort  cannot  claim 
remuneration  on  the  ground  of  being  at  all  exceptional. 
A  railroad  president  collects  fifty  thousand  dollars  per 
year  for  his  services,  because  he  controls  stock  enough 
to  vote  him  that  salary,  not  because  his  services  are 
worth  that  much  to  the  community  which  the  railway 
serves.  They  may  be  positively  detrimental.  It  is 
unnecessary  to  mention  names  or  instancies.  I^ook  at 
the  railway  history  of  the  last  thirty  years.  And  as 
for  exceptional  talent,  it  is  no  exaggeration  to  say  that 
there  are  ten  thousand  men  in  the  United  States  to-day, 
each  drawing  a  salary  under  five  thousand  per"  year, 
who  would  make  railway  presidents  as  able  and  reliable 
in  every  respect  as  any  now  drawing  fifteen  to  fifty 
thousand  dollars  for  such  services.  Judging  from  re- 
sults, railway  officials,  notwithstanding  the  princely 
salaries,  have  been  criminally  negligent  of  their  trusts, 
or  else  criminally  inefficient.  Railroads  make  a  poorer 
showing  than  any  other  class  of  business  enterprises, 
having  had  one-third  of  the  wh(do  mileage  in  tli<' hands 
<if  roceivf-rs  at  once. 

A  lawy(ir  gets  one  hundred  thousand  dollars  for  a 
case,  and  his  whole  effort  lias  been  toward  oppressing 
the  toilers  from  the  product  of  wliose  toil  he  is  remu- 
nerated. The  large  ftr-e  is  usually  for  unscrupulousness. 
There  are  a  thousand  others,  whose  yearly  incomes  are 
not  one-twentieth  <jf  that  sum,  as  learned  in  the  law  as 
h^..     Indeed,  it  is  an  open  queHti<jn   whether  if  ev^'ry 


116  A  BREED  OF  BARREN  METAL 

lawyer  in  the  United  States  were  disbarred  to-day  and 
turned  to  useful  occupations, and  justice  were  adminis- 
tered on  man's  sense  of  equity  and  a  common  sense  in- 
terpretation of  the  law,  the  cause  of  real  justice  would 
not  be  furthered,  and  the  community  be  in  all  respects 
better  olf.  We  would  certainly  have  a  less  complicated 
and  more  comprehensible  system  of  law.  Any  man 
with  a  fair  English  education  and  a  degree  of  common 
sense  could  draft  laws  more  intelligible  to  the  average 
citizen,  who  is  supposed  to  understand  them,  and  infi- 
nitely more  terse  than  the  product  of  the  lawyer.  With- 
out the  quibbling  lawyer  these  laws  would  discover 
little  ambiguity,  common  sense  could  easily  find  the  in- 
tention and  interpret  in  that  light.  The  effort  of  the 
lawyer  seems  to  be  to  make  laws,  as  lawmaker,  which 
he,  as  a  lawyer,  can  pervert  for  the  benefit  of  his  client, 
whether  that  client  be  seeking  that  which  of  right  be- 
longs to  him,  or  seeking  to  despoil  another.  T^awyers 
have  meshed  the  laws  into  such  a  Chinese  puzzle  that 
no  one  pretends  to  know  a  tithe  of  the  law  of  the  land, 
although  there  is  an  agreeable  fiction  that  no  one  is 
ignorant  of  the  law-. 

I  do  not  mean  to  insinuate  that  lawyers  as  a  class 
are  naturally  less  honest  or  more  obtuse  than  other 
men,  but  I  do  affirm  that  most  of  them  are  striking  in- 
stances of  good  talent  perverted  to  unholy  purposes. 
They  are  a  necessary  product  of  a  vicious  industrial  sys- 
tem and  thrive  on  the  reprisal  element  of  modern 
commerce.  From  the  standpoint  of  the  toiler  they  are 
certainly  entitled  to  no  more  remuneration  than  that 
claimed  by  the  average  worker. 

The  doctor  with  enormous  income  is  as  often  the 
charlatan  whose  profession  of  empirics  and  experiment 
applied  to  questions  of  life  and  death  he  uses  as  a 
means  of  extorting  money,  as  he  is  an  honest,  earnest 
worker,  trying  to  learn  the  laws  of  health  and  to  ini- 
press  them  on  his  patient.  And  the  learned  doctors  who 
get  less  than  five  thousand  per  year  are  twice  as  numer- 
ous as  those  whose  eye  for  extortion  and  dishonesty 
gives  them  greater  incomes.  Strip  medicine  of  its  pre- 
tense, of  its  juggling  with  the  sacred  right  of  life.    Let 


A  BREED  OF  BARREN  METAL  117 

doctors  lell  the  truth  and  throw  away  drugs  which  the 
most  learned  will  not  positively  assert  to  be  of  benefit 
to  the  sick,  and  the  twenty  thousand  per  year  practices 
would  be  so  few  that  they  might  be  ignored,  and  the 
number  of  doctors  would  be  reduced  by  one-half,  with 
infinite  benefit  to  the  health  and  pockets  of  the  com- 
munity. On  the  basis  of  a  return  for  what  it  receives, 
no  community  can  afford  to  pay  a  doctor  twenty  thou- 
sand per  year,  unless  it' be  for  his  usefulness  in  getting 
rid  of  undesirable  characters,  and  then  it  should  induce 
him  to  take  his  own  iiiedicine. 

Neither  medical  nor  legal  fees  should  be  so  high  that 
the  best  talent,  when  needed,  may  not  be  at  the  com- 
mand of  the  humblest,  and  this  is  clearly  impossible 
where  the  services  of  a  professional  man  for  a  few  hours' 
work  is  greater  than  a  toiler's  salary  for  a  year.  Highly 
paid  lawyers  and  doctors  simply  share  the  unearned 
incomes  wrung  by  capitalists  from  industrial  workers 
through  interest-taking,  and  if  these  unearned  incomes 
were  done  away  with  the  lawyer  or  the  doctor  would 
be  obliged  to  give  his  services  for  what  they  are  worth. 
I  fear  that  some  of  them  would  have  very  slight  re- 
muneration. 

Literary  men  hardly  ever  get  very  unusual  salaries. 
Where  they  make  an  exceptional  amount  it  is  usually 
as  business  men.  It  would  be  difficult  to  measure  their 
just  remuneration.  If,  as  is  often  assumed,  they  had  a 
monopoly  of  the  thought  which  they  express,  their  re- 
muneration should  be  very  large,  indeed.  But  the  fact 
is,  that  the  burning  thoughts  which  they  express  so 
well  were  the  common  property  of  a  thousand  lirains 
before  their  accredited  authors  ever  put  pen  to  paper. 
If  they  had  not  expressed  them,  others  woukl.  Thoughts 
are  a  product  of  community  civilization  as  truly  as  land 
values  are.  Shakespeare's  age  had  a  hundred  lesser 
Shakespeares  who  might  have  been  greater  had  Shakp- 
si)eare  never  been.  Has  the  reader  never  had  a  thought 
which  h(;  imagined  all  his  own  until  on  hjoking  ov(n' 
printed  i)ages  lie  found  that  thought  expressed  better 
than  he  could  havf;  expressed  it,  and  already  given  to 
the  world?     I  think  it  is  the  experience  of  every  one 


118  A  BREED  OF  BARREN  METAL 

who  thinks  at  all.  Indeed,  literary  glory  depends  more  <  n 
the  manner  of  expressing  than  on  the  ability  to  conjure 
up  great  thoughts.  Back  of  the  whole  race  of  thro)3bing, 
sentient  beings  there  seems  a  great  volume  of  knowl- 
edge which  kindly  nature  turns  over  page  by  page  be- 
fore the  eyes  of  all  who  care  to  read.  It  can  be  read 
only  when  the  page  is  turned,  then  it  is  common  prop- 
erty. There  is  some  great  world  spirit  sitting  on  that 
throne  of  knowledge  which  wiH  allow  no  one  to  -be  a 
miser  with  his  thoughts.  If  you  would  keep  them,  use 
them  first.  As  great  thoughts  depend  on  no  one  person 
in  particular,  no  one  can  claim  any  especial  remunera- 
tion for  great  thoughts. 

The  enormous  prices  paid  for  works  of  art  are  a  relic 
of  the  barbaric  spirit,  still  strong  in  the  child,  to  want 
that  which  others  cannot  have,  instead  of  enjoying  it 
all  the  more  because  others  enjoy  it.  It  is  indulged  by 
the  possession  of  unearned  incomes  founded  on  interest, 
and  would  be  destroj^ed  with  the  destruction  of  these 
interests.  Those  thousands  of  dollars  are  not  for  the 
artistic  ability  displayed,  but  to  gratify  a  barbaric 
pride.  A  people  can  afford  nothing  which  all  may  not 
enjoy. 

All  great  devices  are  invented  by  degrees,  so  much 
so  that  they  are  the  common  property  of  several  before 
they  ever  see  the  light.  Like  the  infant  learning  to 
walk,  man's  steps  into  the  field  of  knowledge  are  feeble 
and  tottering.  He  cannot  leave  the  bench  of  present 
knowledge,  but  must  drag  it  with  him  as  his  support 
in  fields  unknown.  If  Fulton  had  not  invented  the 
steamboat,  some  one  else  would.  Stephenson  did  but 
a  little  more  than  some  others  toward  perfecting  what 
was  initiated  by  a  Greek  or  Egyptian,  who  can  say 
which  Greek?  There  was  a  world  of  knowledge  upon 
the  history  of  civilization  in  one  of  the  railway  exhibits 
at  the  World's  Fair,  and  it  said  in  thunder  tones,  how 
insignificant  is  the  influence  of  any  one  man!  Edison 
has  patented  what  a  hundred  others  were  toiling  with 
as  well  as  he.  Those  who  are  known  as  the  inventors  of 
this  or  that  machine  are  entitled  to  no  very  especial 
remuneration. 


A  BREED  OF  BARREN  METAL  119 

It  is  the  same  with  great  discov  eries  in  science.  The 
observations  of  the  Chaldean  shepherds  were  necessary 
to  the  truths  enunciated  by  Laplace. 

The  very  large  pay  of  the  so-called  histrionic  artist  or 
concert  singer  is  founded  largely  on  the  fashionable 
extravagance  of  those  in  control  of  unearned  incomes. 
It  is  the  same  principle  as  that  which  governs  the  price 
of  works  of  art. 

Who  can  say  who  invented  ^Irinting?  Who  wrote  the 
books  of  Moses  or  the  Zend  Avesta?  Who  wrote  the  poems 
of  Hesiod?  Who  were  the  pioneers  in  Anglo-Saxon  lit- 
erature? Who  really  gave  the  laws  of  Solon?  Who 
first  discovered  America?  Who  furnished  the  ideas 
for  Hamlet  or  the  Divine  Comedy?  Who  will  answer? 
The  more  the  person  questioned  knows  about  these 
things,  the  less  likel}^  he  is  to  be  dogmatic.  The  great 
individual  is  but  a  bubble  on  the  surface  of  the  mighty 
current  of  humanity,  a  bubble  sent  up  by  a  trifling  for- 
tuity.. He  has  as  little  to  do  with  the  headlong  course 
and  sweeping  might  of  that  current  as  the  chip  on  the 
broad  Mississippi's  breast  has  to  do  with  directing  the 
course  of  the  great  father  of  waters.  He  simply  shows 
whither  it  sweeps.  While  none  are  overmastering,  none 
can,  on  the  principle  of  reward  for  services,  claim  an 
overmastering  prize.  To  the  swiftest  is  the  race,  but 
the  rules  of  the  course  should  be  the  greatest  good  to 
the  greatest  number.  He  who  reaches  the  goal  a  second 
ahead  of  a  thcnisand  others,  should  not  get  a  prize  as 
large  as  the  thousand,  especially  when  his  gain  is  due 
to  a  better  start. 

While  talents  differ  widely,  from  the  highest  to  the 
lowest,  as  the  giant  towers  above  the  dwarf,  no  one  has 
talents  far  above  all  of  his  fellow  men.  The  giant 
touches  shoulders  with  other  giants.  Xo  man  is  then 
entitled  iv  any  very  exce[)tioiial  remuneration  on  the 
score  of  his  services  to  other  men.  No  man  ever  earned 
fifty  thousand  })er  year,  not  to  s[)eak  of  saving  from 
twenty  to  fifty  times  that  amount.  There  never  was  a 
man  on  earth,  and  never  will  be,  wIkjs*^  services  mighl 
not  have  l)een  dispensed  with  without  making  the  <'arth 
perceptibly  poorer  in  any  respect;     and  some  of  the 


120  A  BREED  OF  BARREN  METAL 

most  valuable  have  received  scarcely  any  material  re- 
muneration. The  vast  difference  in  the  remuneration 
of  men  depends  on  the  power  of  some  to  control  the 
results  of  others'  toil,  and  that  power  depends  on  rent 
and  interest.  Men  have  long  since  abandoned  the  idea 
of  getting  rich  otherwise  than  by  appropriating  what 
rightfully  belongs  to  others. 

Ability  is  the  great  factor  in  production  and  ability 
should  receive  the  reward,  wisely  remarks  the  apologist. 
What  ability?  Ability  to  appropriate  or  to  produce? 
As  we  have  seen,  ability  does  not  dift'er  widely  in 
tangible  material  production.  As  we  have  seen,  inven- 
tions of  great  effectiveness  are  dependent  on  no  one 
man.  As  we  have  seen,  talent  is  not  rare;  what  any 
one  man  has  accomplished,  thousands  of  others  might 
and  would  have  accomplished.  Otherwise  the  place  of 
no  important  personage  could  be  filled,  but  they  are 
filled  by  the  hundred  every  day  and  the  world  does  not 
see  the  difference.  But  as  we  have  seen,  it  is  not  in- 
ventive power,  nor  genius  in  production,  nor  great 
merit  of  any  sort  which  receives  the  material  prizes. 
It  is  low,  stealthy  cunning  and  unscrupulousness, 
largely. 

If  ability  to  serve  were  the  measure  of  reward  many 
men  in  high  places  would  now  be  living  very  frugal 
lives.  The  ability  which  is  exhibited  for  an  important 
consideration  is  not  rare.  Any  one  of  twenty  states  in 
the  Union  could  supply  a  president,  cabinet,  congress 
and  supreme  court,  who,  with  as  much  training,  would 
be  as  ethcient  as  our  present  government  force  and  take 
no  man  who  earned  over  five  thousand  dollars  per  year 
either.  The  fact  is  that  the  highest  salaried  officers  of 
government  or  corporations  are  merely  figure-heads  so 
far  as  the  practical  business  is  concerned.  The  presi- 
dent's labor  is  ended  when  he  selects  a  cabinet.  If  it 
is  not, the  country  usually  realizes  that  fact  to  its  ever- 
lasting sorrow.  No  matter  how  able,  the  president 
cannot  have  knowledge  of  details  in  all  branches,  suffi- 
cient to  enable  him  to  make  an  intelligent  decision  on 
the  practical  questions  which  come  before  him,  and  he 
must  take  the  judgment  of  some  one  whose  efforts  are 


A  BREED  or  BARREN  METAL  121 

confined  to  a  narrower  field.  The  people  decide  the 
principle  which  is  to  be  applied,  so  the  chief  executive 
is  only  a  sort  of  button  for  under  olficers  to  touch  in 
carrying  on  the  ati'airs  of  government.  The  same  is  true 
of  all  officers  of  large  corporations.  They  must  depend 
for  their  action  on  the  judgment  of  lawyers,  promoters, 
confidential  clerks  and  managers.  And  it  is  no  reflec- 
tion on  the  officer  to  say  this.  From  his  position  he 
must  necessarily  be  a  figure-head,  except, perhaps,  in  his 
judgment  of  the  men  about  him,  which  he  has  every 
opportunity  to  know.  Hence  the  high  positions  require 
less  real  ability  than  those  considered  less  important. 
On  the  score  of  required  ar)ility  the  confidential  clerk, 
attorney  or  promoter,  the  cabinet  or  assistant  cabinet 
officer  sliould  have  larger  income  tlian  the  head  of  the 
corporation  or  the  government,  but  such  is  not  the  case. 

Ability  has  nothing  to  dow^ith  remuneration;  remu- 
neration or  income  depends  on  one's  power  to  appropriate 
and  this  depends  on  interest  and  rent-taking. 

We  often  hear  it  said  by  apologists  for  plutocratic 
privileges,  that  this  or  that  income  does  not  come  out 
of  the  people's  pockets  and  .the  people  have  no  cause 
for  complaint  about  it.  People,  they  say,  have  a  right 
to  do  what  they  please  with  their  own.  .  This  is  soph- 
istry of  the  rankest  sort.  People  often  have  not  an 
ethical  right  to  do  what  they  please  with  what  is 
legally  their  own,  for  the  reason  that  it  is  not  ethically 
their  own.  And  as  for  the  people  having  no  interest 
in  the  payment  of  big  salaries  to  railway  and  otliercor- 
j)()ration  (jfficers,  they  have  just  as  much  interest  in 
this  as  in  the  manner  in  which  taxes  are  disbursed. 
Wealth  does  not  create  itself,  then  it  is  created  by  pro- 
ductive workers,  every  dollar's  worth  of  it.  Productive 
workers,  then,  have  the  right  to  demand  that  every 
dollar  of  it  brings  them  a  return.  If  a  railroad  pays 
•exorbitant  salari<\s  or  scatters  passes  broadcast,  the 
patrons  of  that  railway,  ultimately  the  productive  toil- 
ers, have  to  bear  thn  fxtravagancf  in  increased  rates. 
If  sjieculators  [)Hrallel  liiiijs  where  commerce  does  not 
demand  it,  kee[)ing  up  the  extra  line  is  a  tax  on  pro- 
ducers.     The  average  fitizt-n  has   just  as  much  interest 


122  A  BREED  OF  BARREN  METAL 

in  seeing  raihvays  run  economically  as  he  has  in  seeing 
the  government  administered  with  economy.  In  fact 
every  business  in  the  country  aftects  every  other  and 
any  extravagance  in  any  is  a  loss  to  every  toiling  citizen. 
In  society,  man  is  bound  to  his  fellow  man  and  has 
obligations  to  fulfill  to  him  whether  he  likes  it  or  not. 
If  I  am  a  boot  manufacturer  and  pay  a  superintendent 
an  exorbitant  salary,  cutting  the  wages  of  my  workers 
in  order  that  I  may  do  so,  I  primarily  wrong  my  em- 
ployes and  indirectly  wrong  every  productive  laborer 
in  the  country.  I  attack  the  financial  interests  of  all 
toiling  citizens.  If  my  empl^oy^s  had  what  they  earned 
they  would  take  more  of  the  product  of  other  concerns 
working  in  their  class  and  make  their  wages  better. 

To  be  sure,  when  one  has  produced  a  thing  it  is  his 
own.  He  may  then  do  what  he  likes  with  it  without 
affecting  any  one,  but  he  must  see  that  he  has  produced 
it  himself  or  given  its  producers  an  adequate  return  for 
it  before  he  can  assume  to  do  with  it  as  he  pleases.  If 
one  wants  to  become  irresponsible  to  his  fellow  man 
let  him  go  on  a  desert  island  where  no  being  exists, 
and  then  he  is  irresponsible  only  until  some  one  else 
comes.  When  another  claimant  to  the  island  arrives, 
some  understanding  as  to  joint  possession  must  be  en- 
tered into  and  the  men  become  immediately  inter-re- 
sponsible. And  even  as  to  w^ealth,  it  is  a  trust,  no  man 
possessing  a  title  other  than  for  use,  present  or  future. 


CHAPTER   XVIII. 

Work  A  Boon— Involuntary  idleness — Extraordinary  expenses  incurred    in    timo?; 
of  financial  distress — Why  they  seem  to  help  the  condition  of  the  country. 

The.  ^^curse  of  humanity'^  is  eagerly  sought  for  by  tJioa- 
sands. 

WliN''  is  work  looked  upon  as  a  boon,  and  like  Mac- 
beth's  power  of  prayer,  he  who  has  most  need  of  em- 
ployment is  left  without  it?  It  is  evidently  because  lie 
has  not  the  means  of  applying  his  labor  to  natural  o])- 
portunities,  or  the  natural  opportunities  themselves 
are  withheld  from  him.  While  he  remains  part  of 
civilized  society,  either  will  deprive  him  of  his  ability 
to  work.  Monopolize  the  wealth  which  has  already 
been  produced  and  you  can  control  further  production, 
dictating  terms  on  which  the  wealth  may  be  used  or 
preventing  its  use  at  all.  Wealth  is  monopolized  by 
controlling  the  surplus,  and  this  is  made  possible  by 
rent  and  interest-taking.  In  times  of  panic  menwho  con- 
trol capital  do  not  wish  to  risk  it  in  industry.  They 
hoard  it  and  the  laborf>rs  remain  idle  and  starve.  Interest 
and  rent-taking  bring  about  panic,and  hence  the  distress 
(jf  the  laborer.  If  wealth  remained  in  the  hands  of  th(^ 
toiler,  he  would  certainly  employ  himself  when  he 
needed  employment.  Rent  and  interest  take  it  from 
liim. 

When  a  })usiness  man  is  in  financial  trouble,  he  lops 
off  every  exptMise  possililo  and  lives  ch)sely  until  he  gets 
out  of  iiis  didiciilty.  lie  wouhl  not  think  of  imdertnk- 
ing  a  new  buihliiig  or  incurring  any  (3x1  raordinary  ex- 
j)ens(',  while  pressed  for  money.  Yet,  at  times  of  ])anic 
and  depression,  the  most  extravagant  schemes  of  pub- 
lic imjjrovement  are  undertaken,  entailing  great 
additional  expensf;,  and  they  actually  hfdp   the   oondi- 

12:} 


124  A  BREED  OP  BARREN  METAL 

tion  of  the  country.  This  seeming  paradox  is  explained 
by  the  fact  that  a  portion  of  the  hoarded  capital  which 
was  withheld  from  laborers  is  released  and  the  laborer 
is  given  an  opportunity  to  work  and  create  an  effective 
demand  for  the  wealth  tied  up  by  the  hoarding  of  other 
wealth  or  its  currency  representative.  The  embargo 
of  the  rent  and  interest  collector  is  raised.  If  wealth 
were  not  in  the  wrong  hands,  care  would  be  taken  to 
place  it  first  in  the  most  remunerative  emj)loyment,and 
extraordinary  improvements  would  naturally  be  left  to 
prosperous  times.  While  a  few  men  have,  through  rent 
and  interest-taking,  power  over  the  fixed  capital  of  the 
country,  they  will  hoard  it  when  in  danger  and  leave 
the  bulk  of  laborers  idle  and  starving,  and  all  business 
paralyzed.  Capital  should  be  in  the  hands  of  those  who 
must  use  it  to  earn  their  daily  bread. 


CHAPTER    XIX. 

War  and  Prosperity — Their  connection   explained — Historical   testimony— The 
war  spirit  and  slavery— Revolution. 

Man  versus  Mammon. 

War,  the  great  destro.yer  of  life  and  treasure,  often 
ushers  in  new  eras  of  national  prosperity.  It  is  certainly 
not  the  destruction  of  property  which  has  benefited  the 
nation,  for  that  makes  everybody  poorer.  It  is  merely 
because  of  its  leveling  propensities.  The  prosperity  of 
a  nation  depends  on  the  prosperity  of  her  common  peo- 
ple. A  destructive  war  brings  from  their  hiding  places 
the  hoards  of  the  wealthy.     It  decentralizes   wealth. 

The  immense  destruction  calls  for  immense  produc- 
tion, so  that  all  capital  must  be  employed.  The  scarcity 
of  laljorers  makes  it  necessary  for  capitalists  to  pay 
higher  wages,  i.  e.,  give  the  laborer  a  greater  part  of 
the  wealtii  which  he  produces.  He  therefore  consumes 
more  and  is  a  better  customer  to  other  productive 
workers.  Business  is  active,  times  good.  The  capitalist 
is  obliged  to  disgorge  and  allow  his  wealth  to  be  used 
in  production  lest  he  lose  all.  He  cannot  exact  of  toil- 
ers such  heavy  tribute. 

History  is  full  of  testimony  as  to  the  salutary  effect 
of  wars  on  industrial  prosperity.  According  to  Ramsey, 
the  common  people  were  innisually  prosperous  during 
the  Rev(jlutionary  war.  We  still  hear  laborers  speak 
of  the  "good  times"  during  the  war  of  the  Rebellion. 
The  FreiK'Ji  of  the  revoluti(Miary  period  held  monarch- 
ical Europe  back  with  one  hand  and  at  the  same  time 
gave  a  l)etter  living  to  the  common  people  than  they 
had  known  for  centuries.  They  were  prosperous  be- 
cause relieved  of  the  tribute  to  the  usurer  and  landlord. 

It  is  a  grim  fact  in  the  history  of  the  Avorld  that  un 

125 


12(3  A   BREED    OF    BARREN    METAL 

warlike. nations  become  peopled  by  races  of  slaves. 
The  more  robust  the  war  spirit,  other  things  being 
equal,  the  freer  and  more  prosperous  the  nation.  In- 
stance a  comparison  between  the  nations  of  Eurojje  and 
those  of  China  and  the  east.  This  fact  is  inexplicable 
except  on  one  hypothesis,  for  war  is  in  itself  destruc- 
tive, and  the  military  rule  inimical  to  liberty.  But 
the  explanation  is  that  war  prevents  the  accumulation 
of  wealth  in  the  hands  of  a  caste,  it  is  a  great  leveler 
and  equalizer.  It  is  in  that  way  a  heroic  remedy  for 
a  terrible  malady.  Of  course,  I  refer  to  wars  which  stir 
up  the  whole  population. 

It  is  the  wealth  which  is  absolutely  secure  in  the 
same  hands  which  is  dangerous  to  the  liberties  of  a 
country.  Show  me  a  nation  where  revolution  is  un- 
known, and  I  will  show  you  a  nation  of  serfs.  I  can 
go  further  and  show  that  revolution  and  serfdom  usu- 
ally appear  in  inverse  ratio.  This  does  not  go  to  prove 
that  revolution  is  in  any  way  desirable,  but  that  it  is 
more  so  than  the  desperate  malady  which  it  is  intended 
to  cure.  Wealth  must  I)e  decentralized  by  some  means. 
England,  at  the  van  of  progress,  is  a  country  where 
the  revolution  is  usually  silent  and  seemingly  infre- 
quent. Her  active  spirit  of  colonization  and  the  open- 
ing up  of  new  fields  of  industry  to  her  people,  as  well 
as  the  broad  commercial  spirit  of  her  sons,  have  served 
to  neutralize  the  tendency  to  crystallization  in  her 
economic  circles  and  to  preserve  the  industrial  and 
political  liberty  of  the  masses.  Shut  England  up  by 
herself  and  let  her  inhabitants  prey  uj^on  one  another 
only,  as  the  inhabitants  of  other  nations  are  accustomed 
to  do,  and  the  c(nintry  would  be  no  exception  to  the 
proposition  that  some  influence,  disturbing  to  vast 
centralization  of  wealth,  is  needed  to  preserve  the  lib- 
erties of  a  people.  The  opening  of  a  new  continent,  of 
itself,  brings  about  a  revolution.  In  new  countries, 
class-making  must  begin  anew.  The  spirit  of  equality 
which  is  inspired  by  the  reaction  of  the  new  nations 
upon  the  old,  acts  as  a  leveler,  and  puts  off  the  pluto- 
cratic crisis. 


CHAPTER  XX. 

Wealth  and  National  Stadility— Why  great  wealth  has  proved  destructive  to 
great  nations — The  basis  of  national  integrity — Wealth  and  the  means  of  get- 
ting it. 

A  law-sanctioned  wrong  to  the  humblsst  citizen  is  a  na- 
tional wrong. 

Why  is  it  tliat  the  accumulation  of  wealth  has  here- 
tofore proved  the  destruction  of  the  greatest  nations? 
Up  to  a  certain  limit,  wealth  is  power.  There  is  no 
reason  why  it  should  enervate  a  man  to  suppl}' his  legit- 
imate wants.  Leisure  and  refinement  should  give  man 
greater  control  over  himself,  teach  him  better  how  to 
live,  to  govern,  to  secure  stability  to  the  state.  Yet  we 
have  Egypt  and  Assyria  and  Rome  and  Carthage  and 
Greece  to  testify  to  the  fact  that  great  accumulations 
of  wealth  in  the  hands  of  a  few  of  a  country's  citizens 
means  moral,  political  and  industrial  decay.  We  may 
yet  learn  the  lesson  from  a  more  modern   tutor. 

On  the  theory  that  each  man  is  entitled  to  what  he 
can  extort,  this  fact  of  the  destructive  j)ower  of  wealth 
is  utterly  inexplicable.  It  revolts  our  common  sense 
as  well  as  our  sense  of  logic,  to  assume  that  what  is 
right  can  lead  to  a  radically  evil  result.  If  unlimited 
appropriation  is  right,  the  civilization  founded  on  it 
.should  lie  righteous  and  enduring.  If  such  has  not  been 
the  result, then  unlimited  appro])riation  cannot  be  right. 
That  is  where  the  explanation  lies. 

The  prosperity  of  a  nation  depends  on  thn  prosperity 
of  all  its  people.  If  any  considerable  portion  of  the 
innal)itants  of  a  nation  are  ground  down,  the  nation 
itself  will  soon  feel  their  misery.  The  nations  of  old, 
like  the  nations  of  to-day,  ])ermitted  intf-n'st  and  rent- 
taking.  The  w<'altli  of  the  nations  accumulatrnl  in  the 
hands  of  the  few.     The  laborers  of  the  nations  becanuj 

127 


128  A  BREED  OF  BARREN  METAL 

poverty-stricken.  Poverty,  abject  and  continued,  bred 
vice,  lawlessness,  decay.  Men  became  hungry,  then 
craven,  then  brutal,  and  lost  all  idea  of  justice.  Like 
the  hungry  wolf,  the  gnawing  wants  of  the  animal  alone 
were  felt,  and  no  method  or  means  which  would  supply 
that  want  was  scorned.  Men  became  slaves,  women 
strumpets. 

On  the  other  hand  the  means  used  in  accumulating 
enormous  wealth  drove  from  the  soul  of  the  wealthy  all 
idea  of  right.  They  began  to  doubt  that  there  was  any 
such  thing  as  right  in  the  world.  The  idle,  useless  lei- 
sure which  they  obtained  through  their  wealth  oj^pressed 
them  and  they  plunged  from  one  excess  to  another. 
They  had  the  means  to  gratify  every  whim.  They  had 
no  need  to  resist  any  self-indulgence.  They  soon  be- 
came unable  to  resist  it.  Producers  became  worthless, 
their  masters  more  worthless.  A  state  can  no  more  be 
upheld  without  citizens,  than  a  great  building  can  be 
constructed  of  mud  bricks.  The  state  crumpled,  or  fell 
a  prey  to  stronger  peoples  whom  wealth  had  not  cor- 
rupted. 

While  the  causes  remain,  the  effects  are  sure  to  fol- 
low. We  are  in  this  great  republic  following  in  the 
footsteps  of  Roman  luxury.  We  are  undermining  the 
integrity  of  citizens  by  the  extremes  of  poverty  and 
wealth,  and  if  we  keep  on  w'e  shall  pay  the  penalty. 
Give  to  every  man  what  belongs  to  him  and  none  will 
have  wealth  to  grovel  in,  none  will  feel  the  imbruting 
influences  of  poverty  and  want. 


CHAPTER  XXL 

The  Yeomen  of  America— The  passing  of  the  independent  farmer— The  change 
in  the  character  of  the  agricultural  class— Causes— A  peasantry  being 
formed— Danger  to  institutions— How  it  may  be  avoided. 

■'But  a  hold  peamntnj,  its  country's  pride, 
Wlien  once  destroyed  can  never  be  supplied.'' 

The  veoman  of  America,  the  independent  farmer,  is 
hIonvIv  passing.  His  toil  is  unprofitable  as  unceasing. 
He  is  droi)i)ing  behind  in  the  march  of  progress.  He 
has  become  the  jest  of  the  narrow,  ignorant,  shallow 
minion  of  plutocracy,  but  a  warning  to  all  thinking 
people  with  the  interest  of  their  country  at  heart. 

It  is  true  that  we  have  passed,  to  some  extent,  from 
an  agricultural  to  a  manufacturing  population,  but 
this  does  not  account  for  the  abandoned  or  dilapidated 
farm.  There  are  millions  more  mouths  to  be  fed.  The 
demand  for  farm  produce  has  not  fallen  off,  yet  farming 
is  unprofitable.  The  margin  of  profits  in  agricultural 
l)ursuits  has  dwindled  to  xero,  and  the  product  of  the 
fanner  is  not  now  suHieient  to  reward  the  toil  of  the 
producer.  I  have  alr(.nuly  given  an  instance,  but  I  will 
make  it  more  s])ecific.  On  well  known  business  princi- 
))h's,  agriculture  cannot  long  continue  to  i)aymuch  less 
in  one  ])ortion  of  tlie  c<)Uiitry  than  in  another.  The  busi- 
ness will  soon  be  abjuuloned  where  it  is  least  profit- 
able, A  typical  instance  in  one  sc-ction  of  the  country 
is  largely  typical  of  the  situation  in  the  whole  country. 
To  simplify  the  matter,  we  will  assume  that  the  farmer 
owns  iiis  farm  and  works  it  with  his  own  hands.  A 
man  with  a  good  teaui  can  work  a  wheat  farm  of  fifty 
acres,  with  the  jii*!  of  an  additional  hand  for  aVxtut 
thirty  days  at  harvest  ti 'I'his  will  give  employ- 
ment to   the   man    and    team    for   tin-    whole  year,  and 


I'^O  A  BREED  or  BARREN   METAL 

rather  arduous  employment  it  will  be.  A  farm  of  fifty 
acres,  in  Minnesota,  for  instance,  within  one  Jiundreil 
and  fifty  miles  of  Minneapolis,  the  great  lloiiring  cen- 
ter, is  worth,  with  l)uildings  and  improvements,  about 
two  thousand  dollars  The  team  and  machinery  suffi- 
(!ient  to  enable  onc^  man  to  work  that  farm  is  wortli, 
ov  was  during  the  decade  froni  1880  to  1890,  about  five 
hundred  dollars.  The  land  and  capital  employed  then 
would  be  worth  about  twenty-five  hundred  dollars, 
something  less  than  half  the  value  being  land  and  half 
wealth.  The  expense  of  working  and  maintaining  that 
farm  for  a  year  would  be  substantially  as  follows: 
Seed,  $45;  feed  for  team,  $100;  deterioration  of  im- 
provements, $40;  taxes  (local,  state  and  school),  $25; 
tlireshiug,  $50;  insurance,  $5;  hire  of  hand  with  board 
(thirty  days  during  harvest  season),  $40,  making  a  total 
of  $805,  besides  the  labor  of  the  farmer. 

The  very  best  land  with  the  very  best  cultivation 
will  not  average,  year  after  year,  more  than  twenty 
bushels  to  the  acre,  but  I  take  this  return,  as  it  will 
be  equal  to  any  crop  the  farmer  may  raise  and  in  that 
way  represent  the  case  of  the  mixed  farmer  also.  The 
census  figures  give  an  average  yield  in  different  years 
of  from  about  thirteen  to  less  than  fifteen  bushels  to 
the  acre.  Wheat  requires  less  labor  than  any  other 
crop.  Placing  the  yield  at  one  thousand  bushels  or 
twenty  bushels  to  the  acre  would  give  the  farmer  a 
gross  return  of  six  hundred  dollars,  or  a  net  income  or 
wage  of  two  hundred  and  ninety-five  dollars.  This  he 
must  live  on  and  feed,  clothe  and  educate  his  children. 
And  this  is  the  wage  of  the  prosperous  farmer,  the  envy 
of  his  fellow  farmers. 

If  the  farmer  of  the  northwest  could  be  sure  of  twenty 
bushels  of  wheat  to  the  acre  and  sixty  cents  per  bushel 
therefor,  or  a  crop  of  mixed  product  equal  to  that,  we 
should  hear  little  murmur  of  hard  times.  Yet  what  a 
pittance  is  two  hundred  and  ninety  dollars  per  year 
with  which  to  raise  a  family,  who  are  supposed  to  take 
their  place  as  intelligent  American  citizens  and  to  direct 
the  destinies  of  the  nation  I 

To  be  sure,  the  most  common  sort  of  farming  is  mixed 


A  BREED  OF  BARKEN  METAL  131 

farming,  where  men,  women  and  children  engage  in 
the  toil,  but  the  small  farmer's  income  is  scarcely  ever 
more  than  is  indicated  above. 

When  you  put  the  farmer,  then,  on  a  leased  farm  or 
require  him  to  meet  a  mortgage  upon  his  own,  his  liv- 
ing falls  below  the  line  of  respectability.  He  and  his 
family  are  required  to  try  to  exist  on  one  hundred  and 
fifty  or  two  hundred  dollars  per  year. 

The  American  citizen  will  refuse  to  do  this.  He 
fails,  goes  to  the  cities  and  swells  the  crowd  constantly 
surging  against  the  line  of  starvation.  The  peasant 
farmer  from  Europe  takes  the  farm,  and  our  yeomanry 
is  turned  into  a  poverty-stricken  peasantry  with  tradi- 
tions of  kings  and  slavery.  The  Americans  who  remain 
soon  reach  the  same  condition.  There  are  but  two  ways 
left:  either  to  fall  to  the  scale  of  living  of  the  Eurojx'nn 
peasantry,  or  let  the  debt-burdened  farm  go. 

The  secret  of  the  whole  trouble  lies  in  interest-taking 

If  the  farmer  is  not  paying  interest  on  a  farm  mort- 
gage, he  is  paying  interest  on  the  bonds  of  the  railways 
which  haul  his  wheat,  and  probably  besides  princely 
salaries,  dividends  and  speculative  profits.  He  is  pay- 
ing capital  profits  on  a  hundred  things  which  he  is 
obliged  to  use  and  capital  profits  and  speculative  charges 
on  the  grain  he  sells.  Or  rather,the  consumer  is  ])aying 
these  charges  without  giving  the  ])roducing  farmer  any 
benefit. 

Farm  life  is  lonely  enough  without  adding  to  it  the 
gloom  of  want.  There  is  no  toil  so  exacting,  no  occu- 
pation has  such  a  monotonous  round.  It  is  no  wonder 
that  the  youth  fly  from  it  and  that  the  aged  become 
bent  and  hard  and  grasping  and  narrow,  a  beautiful 
subject  for  the  plutocratic  tool,  too  hair-brained  to  see 
the  tragedy  of  what  he  caricatures.  More  than  likely 
he  has  escaped  from  the  dull  and  awful  grind  to  turn 
traitor  and  spurn  the  stepping  stones  to  his  succ'oss,  if 
he  has  any. 

If  the  American  farn)er  is  not  to  pass  to  tenancy 
through  the  gat(;  of  foreclosun;  or  bankruptcy,  be  must 
be  relieved  of  direct  or  indirect  interest  charges. 

Til"'  line  which  divifles  the  tenant  fnrnuM'  <if  America 


182  A  BRKEI)  OF  BARREN  MKTAL 

from  the  European  peasant  is  fast  being  obliterated, 
and  if  America  would  secure  the  integrity  and  independ- 
<>nce  of  a  vast  body  of  her  citizens,  she  must  see  to  it 
that  the  burden  of  the  farmer  is  lightened.  Garrison 
said  that  you  could  not  enslave  one  human  being  with- 
out menacing  the  liberties  of  the  world.  Y(ni  cannot 
degrade  one  human  being  without  degrading  the  whole 
nation. 


CHAPTER   XXII. 

Mortgage  Indebtedness — Its  rapid  increase — Is  it  an  evidence  of  prosperity? — 
Arguments  to  that  effect  analyzed — Debts  and  assets — Increase  in  wealth  as  a 
whole  not  necessarily  a  sign  of  national  prosperity — A  specimen  of  plutocratic 
reasoning — Figures  as  to  the  relation  of  farm-mortgage  debt  to  prosperity — 
Value  of  product,  not  of  capital,  the  measure  of  debt-paying  power — Census 
figures  analyzed — The  conclusioji — Mortgage  debts  in  general — General  con- 
clusions. 

Debts  are  never  assets. 

The  magnitude  and  rapidity  of  increase  of  the  mort- 
gage indebtedness  of  tlie  country  is  little  short  of  amaz- 
ing. During  the  nine  years  preceding  January  1,  1800, 
the  mortgage  del)t  of  the  country  increased  more  than 
one  hundred  and  fifty  per  cent,  and  the  percentage  of 
increase  of  mortgage  indebtedness  contracted  in  1890, 
over  the  indebtedness  contracted  in  1880,  was  more 
than  one  hundred  and  forty  per  cent.  In  1889  the  mort- 
gage indebtedness  of  the  United  States  was  six  billions 
nineteen  millions  and  one-half.  At  the  rate  of  increase 
which  ol)1ained  from  1880  to  1890,  we  would  now  be 
[taying  interest  on  a  mortgage  indebtedness  of  more 
than  ten  billions. 

I  am  aware  that  a  certain  wise  economist  pronounces 
mortgage  indebtedness  a  sign  of  prosperity.  I  would 
have  more  regard  for  his  sincerity  if  1  had  less  for  his 
intellect.  It  would  be  diflicult  to  convince  a  gentleman 
of  Mr.  Atkinson's  exi)erience  as  a  hard-headed  business 
man,  that  debts  are  assets,  or  that  the  larger  the  debts 
of  a  firm, relative  to  its  assets,the  better  their  linancial 
standing.  If  he  were  to  find  by  consultation  with  his 
•'liradstreet''  that  a  certain  firm  last  year  had  debts  to 
th(!  amount  of  but  one  hundred  thousand  dollars,  and 
asH«;tH  to  the  amount  of  five  hundre'tl  thousand,  and  this 
year  had  debts  to  the  amount  of  two  hundred  and  fifty 
thouHuiul,  while  their  assets  represented  Imt    five   hun- 

133 


184  A  BREED  OF  BARREN  METAI. 

dred  and  tifty  thousand,  he  would  say:  "That  lirm  lias 
lost  one  hundred  thousand  dollars  within  twelve  months; 
they  will  bear  watching. "  The  nation  is  in  just  that 
condition.  Debts  have  increased  much  more  rapidly 
proportionately  than  wealth. 

Indeed,  in  Mr.  Atkinson's  own  article,  founded  on 
the  assumption  that  debts  are  assets,  he  moves  heaven 
and  earth  to  disprove  the  proposition  which  he  lays 
down  on  starting  out.  If  debts  are  a  sign  of  prosper- 
ity, the  prosperity  of  the  American  agriculturist 
should  be  measured  by  his  indebtedness.  Yet  Mr.  At- 
kinson asserts  first  that  debts  are  a  sign  of  prosperity, 
then  labors  to  prove,  and  proves  to  his  own  satisfac- 
tion, that  the  debts  of  the  farming  community  are  rel- 
atively small ;  then,  with  amazing  inconsequence, 
concludes  that  the  farming  community  must  be  pros- 
perous! One  of  the  leaders  of  plutocratic  economic 
science  turning  two  somersaults  in  logic  to  reach  an  a. 
■priori  conclusion  and  then  calling  it  proof!  In  trying 
to  prove  too  much,  Mr.  Atkinson  holds  himself  up  as 
the  acme  of  inconsequential  ridiculousness. 

Even  if  farm  mortgage  debt  had  not  grown  so  rapidly 
as  assets  on  an  average  the  country  over,  that  fact 
would  prove  nothing.  It  does  not  help  the  people  who 
fail  to  know  that  others  succeed.  While  the  average 
in  figures  may  show  prosperity  on  the  whole,  as  is  shown 
in  the  nation  by  the  increase  of  national  wealth,  the 
great  majority  may  be  becoming  poorer  and  poorer. 
There  may  be  much  suffering  where  wealth  as  a  whole 
is  increasing.  No  one  tries  to  deny  that  as  a  nation 
we  are  growing  somewhat  richer.  The  trouble  is  that 
enormous  sums  to  the  credit  of  the  few,  balance  the 
small  but  fatal  losses  of  the  many. 

And  this  is  the  fact  so  far  as  farmers  are  concerned. 

I)€t  statisticians  say  what  they  may,  there  is  distress 
in  farming  communities  to-day.  The  fact  can  be  veri- 
fied by  any  one  who  will  take  the  trouble  to  travel 
through  the  rural  districts  of  any  portion  of  the  country, 
and  observe  and  listen.  Men  do  not  grumble  and  make 
themselves  miserable  for  nothing.  Unpainled,  dilap- 
idated barns,  tumble-down  houses,  and  fences  out  of  re- 


A  BREED  OF  BAKKEN  METAL  185 

pair;  rag;*,  lack  of  cash,  dull,  disheartened  faces  tell 
more  distress  than  figures  ever  can,  especially  when 
manipulated  to  deceive, 

Atkinson  reasons  that  because  a  certain  number  of 
present  farmers  came  to  this  country  a  number  of  years 
ago  with  a  certain  sum  of  money  and  have  now  a  greater 
sum,  they  made  that  money  by  borrowing  on  mort- 
gage security,  and  farming  with  the  capital  borrowed. 
\Vhat  a  ridiculous  string  of  inconsequence!  To  give 
any  color  of  plausiliility  to  his  contention  he  would 
have  to  show:  (1),  that  they  lived  on  farms  ever  since 
they  came  to  this  country;  (2),  that  all  the  money 
which  the}'  made  was  made  by  working  their  farms  and 
not  by  going  to  pine  woods,  to  cities  or  mines,  while 
crops  were  growing  or  after  they  were  gathered,  as  so 
manv  poor  farmers  in  Michigan,  Minnesota  and  Wis- 
consin were  obliged  to  do;  (3),  that  the  mortgages  which 
they  arH  now  charged  with  were  the  bases  of  their  start 
in  farming;  (4),  that  it  was  by  the  use  of  borrowed 
money,  and  not  in  spite  of  it,  that  they  attained  their 
measure  of  prosperity.  But  Atkinson  does  not  trouble 
abotit  stich  trifles  as  logical  sequence  in  his  arguments 
on  "economics."  He  has  gone  beyond  that,  he  is  an 
''authority." 

Figures  will  show  that  the  farm  mortgage  indebted- 
ness is  accountable  for  depression  and  failure  in  the 
farming  business.  According  to  the  statements  of  Car- 
rcjll  D.  U'right  in  a  recent  census  bulletin,  the  debt  on 
acres  and  untaxed  mines  is  equal  to  twelve  and  two- 
thirds  per  cent  of  their  value.  (What  untaxed  mines 
liave  to  do  with  the  calculation  he  does  notmake  clear. ) 
This  would  make  the  value  of  acres  and  improvements 
over  seventeen  billions,  a  valuation  which  is  not  borne 
<jut  by  the  same  gentleman's  figures  on  farm  property. 
If  our  worthy  statistician  wanted  to  give  something 
valuable  why  did  he  jumble  mines  and  farms  together 
and  s«'])aratH  farms  and  lots?  We  must  then  take  his 
tigup'S  of  amount  of  nujrlgage  indebtedness  on  acn? 
pro]i('rty  and  compare  it  with  the  value  of  farm  real 
i-Htalc  This  value  is  given  by  Carroll  I).  Wright  as 
tliirfHPii  and  onc-quartfr   billicms   in    18iK).     Tiu;    debt 


136  A   BREED    OF    BARREN    METAL 

upon  it  (all  figures  in  round  numbers)  is  two  billions 
two  hundred  nine  millions  of  dollars.  On  this  basis  the 
mortgage  debt  on  farms  would  be  seventeen  and  one- 
half  per  cent.  The  total  gross  i:)roduct  of  the  farms  of 
the  United  States  in  1890,  as  given  by  the  same  author- 
ity, was  two  billions  four  hundred  and  sixty  millions 
of  dollars.  The  net  rate  of  interest  on  this  mortgage 
debt  was  seven  and  one-half  per  cent,  and  the  gross 
rate,  including  expenses  of  loan,  was  not  less  than  nine 
per  cent  per  annum.  This  would  make  the  interest 
charge  on  the  mortgage  indebtedness  on  farm  real  es- 
tate alone  more  than  one  hundred  ninety-eight  millions 
per  annum,  or  more  than  eight  per  cent  of  the  gross 
product  of  agricultural  pursuits  for  one  year.  And  this 
does  not  take  account  of  the  fact  that  some  farmers  pay 
no  interest  charges,  so  that  those  who  do  pay,  must  pay 
more  than  eight  per  cent. 

That  is  to  say  that  the  agricultural  industries  which 
employ,  according  to  Mr.  Wright,  a  capital  of  upwards 
of  sixteen  billions,  including  land  values, and  get  a  gross 
yearly  return  of  two  billions  four  hundred  and  sixty 
thousand  dollars  or  fifteen  and  three-eighths  per  cent 
of  the  capital  invested,  are  required  to  pay  a  fixed 
yearly  charge  of  eight  per  cent  of  the  gross  product, 
while  manufacturing  industries  with  a  capital  of  six 
and  one-half  billions  and  a  yearly  product  of  nine  and 
one-half  billions,  cannot  pay  interest,  rent  and  capital 
profits  to  the  extent  of  ten  per  cent.  Yet  persons  en- 
gaged in  agricultural  pursuits  are  comparatively  pros- 
perous! This  is  the  stuff  which  Atkinson  gives  to  an 
intelligent  community,  and  which  our  compiler  of 
"facts"  for  Uncle  Sam,  takes  up  and  retails.  That  the 
business  returning  one-ninth  of  the  gross  product  per 
annum  as  compared  with  capital  invested,  can  afford  a 
fixed  charge  equal  to  the  margin  of  profits  of  the  busi- 
ness nine  times  as  profitable.  Indeed,  if  we  take  Mr. 
Atkinson's  figures  on  the  margin  of  profits,  even  manu- 
facturers with  their  relatively  large  return,  could  not 
begin  to  pay  the  fixed  charges  which  the  agriculturists 
of  the  country  are  called  upon  to  pay.  And  we  saw 
above  that  in  farming,  the  margin  of  profits  is  really 


A  BREED  OF  BARREN  METAL  187 

a  negative  quantity,  without  a  cent  of  rent  or  interest 
to  contend  with. 

But  Mr.  Wright  goes  further.  He  says  that  niortgage 
debts  are  but  one-fourth  of  the  value  which  they  might 
attain  without  affecting  the  rate  of  interest,  and  there- 
fore, he  infers, the  prosperity  of  the  farming  commu- 
nity. 

Let  us  see.  If  the  mortgage  charge  on  acre  property 
were  increased  four  fold,  even  at  a  gross  rate  of  eight 
per  cent, which  would  be  really  much  below  the  actual, 
the  yearly  interest  charge  upon  agricultural  real  prop- 
erty would  be  over  seven  hundred  millions  of  dollars  or 
twenty-nine  per  cent  of  the  gross  yearly  product  of  ag- 
riculture. It  is  needless  to  say  that  that  business  was 
never  undertaken  which  could  meet  such  fixed  charges, 
let  alone  the  business  of  agriculture,  which  by  Mr. 
Wright's  own  figures  is  the  most  poorly  paying  business 
in  the  United  States.  The  only  considerable  business 
which  approaches  it  in  disparity  between  the  capital 
invested  and  the  yearly  return,  is  railroading,  and  one- 
third  of  the  railroads  are  in  the  hands  of  receivers. 
Then  the  railroad  capital  represents  so  much  water  that 
it  is  not  a  fair  comparison.  Again, the  farm-mortgage 
debt  of  1889  was  seventy  per  cent  more  than  that  of 
1880,  while  in  that  decade  farm  product  increased  but 
eleven  per  cent. 

I  am  convinced  from  observation  in  half  a  dozen 
typical  states, and  inquiry  in  others,  that  the  figures  on 
farm  real  estate  and  improvements,  as  well  as  on  in- 
crease in  value  for  the  last  decade,  are  much  too  high. 
If  farm  land  has  increased  in  value  sinc3  1886,  farmers 
have  failed  to  find  it  out.  The  increase  in  value  from 
1880  to'  IS.^0,  except  in  land  settled  in  the  last  decade, 
ha.s  been  largely  counteracted  within  the  last  half  dozen 
years  Much  land  has  been  al)andoned  and  much 
will  sell  for  less  than  it  would  bring  ten  years 
ago.  But  we  will  accept  the  ''facts" of  our  "econ- 
omists" and  allow  them  to  aid  us  in  overt lirowing  their 
ridiculous  conclusions.  The  increase  in  the  value  of 
land  settled  since  1880  is  irrelevant  in  showing  the  busi- 
ness standing  of  farmers  in  IS'.M),  as  compared  with 
1880. 


138  A  BREED  OF  BARREN  METAL 

Whether  there  is  a  margin  between  the  value  of  the 
property  mortgaged  and  the  amount  of  the  mortgage 
has  nothing  to  do  directly  with  whether  the  business 
can  bear  the  burden  and  still  be  profitable.  It  is  the 
relation  of  the  interest  charge  to  the  annual  product, 
or  what  is  left  of  it  after  paying  necessary  expenses  of 
production,  which  must  decide  as  to  whether  this  or 
that  business  can  bear  its  load  of  debt.  To  be  sure,  the 
comparative  size  of  the  debt  is  now  an  indication  of  what 
the  interest  charge  is,  but  were  no  interest  charged  the 
whole  capital  might  be  borrowed  without  affecting  the 
prosperity  of  the  business.  While  the  lender  may  safely 
base  his  estimates  on  the  value  of  the  security,  the 
borrower  must  base  his  on  the  margin  of  profits. 

As  to  the  question  whether  the  agricultural  product 
is  sufficient  to  bear  the  present  interest  charge  and  still 
leave  enough  to  pay  the  necessary  expenses  of  produc- 
tion, there  can  be  but  one  conclusion :  that  it  is  not. 
The  figures  and  common  sense  of  the  matter  agree  with 
observed  facts.  Agriculture  is  overburdened  and  un- 
profitable. There  is  no  miracle  by  which  the  least  pay- 
ing business  is  most  prosj)erous  in  a  period  of  general 
distress.* 

But  we  will  take  the  mortgage  debts  as  a  whole. 
While  the  prosperity''  of  the  farmer  is  important,  it  is 
no  more  so  than  that  of  any  other  honest  toiler.  Taken 
as  a  whole,  we  see  that  while  our  assets  have  increased 
less  than  fifty  per  cent  in  nine  years,  our  fixed  debts 
have  increased  more  than  one  hundred  and  fifty-six  per 
cent.  Any  one  with  ordinary  common  sense,  not  to 
speak  of  economic  knowledge,  who  can  find  a  sign  of 
prosperity  in  this,  is  more  worthy  of  congratulation  on 
his   optimism  than  on  his  intellectual  powers. 

But  while  this  ground  was  being  lost  have  we  not 
heard  prosperity  cried  from  the  housetops?  Certainly, 
the  capitalist  was  prosperous,  he  was  increasing  his 
income  at  an  unheard-of  rate  and  his  voice  is  loudest. 

♦Consider  for  a  moment  that  according  to  census  figures  the  43'/^  millions  who 
live  outside  of  cities  subsist  on  a  gross  yearly  product  of  2,460  million  dollars, 
while  the  18  millions  who  live  in  cities  have  a  gross  product  of  aboiit  six  billions 
of  dollars  per  year,  besides  the  profits  of  merchants  and  the  remuneration  for 
professional  and  personal  services,  and  then  ask  are  farmers  prosperous? 
Three  times  too  many  people  are  trying  to  live  on  farms. 


A  BREED  OF  BARREN  METAL  189 

It  was  the  interest  charge  and  the  rent  tribute  that  was 
piling  up  the  big  aggregate  on  the  wrong  side  of  the 
ledger.  And  judging  from  the  relation  of  the  increase 
in  indebtedness  to  the  increase  of  national  wealth,  all 
of  the  interest  charge  did  not  go  to  American  capitalists, 
either.  Nothing  except  the  principle  of  interest-taking 
can  account  for  a  decline  in  the  fortunes  of  the  pro- 
ducing masses,  in  times  of  profound  peace,  vigorous 
effort  and  abundant  rewards.  The  wealth  was  certainly 
produced;  enough  of  it  to  make  the  w'hole  people  pros- 
perous. The  increasing  mortgage  indebtedness  must 
then  be  an  index  of  its  distribution  between  the  classes. 
The  rich  have  certainly  grown  richer.  Then  it  is  the 
p(jor  who  must  have  suffered,  and  they  suffered  through 
unearned  incomes  of  the  rich.  For  nothing  earned  by 
anyone  can  make  another  poorer. 

We  have  thus  seen  that  the  taking  of  rents  and  in- 
terest is  amply  capable  of  explaining  all  of  the  consid- 
erable disturbances  in  the  industrial  and  financial 
world.  On  the  same  basis  we  might  explain  the  growth 
of  the  tenant  farmer,  the  tenant  population  and  slums 
of  our  cities,  and  a  thousand  lesser  troubles  with  which 
we  are  menaced.  We  can  easily  explain  on  this  basis 
the  fact  that  luxury  and  squalor  go  hand  in  hand. 
None  of  these  phenomena  can  be  satisfactorily  ex- 
plained on  any  other  theory.  Our  industrial,  including 
our  financial  system,  is  based  on  the  taking  of  interest 
and  rents, and  if  these  principles  are  right,  and  are  ap- 
plied, our  system  should  be  faultless.  The  principles 
are  (certainly  ajiplied,  but  the  system  is  certainly  not 
faultless.  Let  the  plutocratic  apologist  afford  an  ade- 
(piate  explanation.  It  has  not  yet  been  done.  The 
nearest  apjjroach  to  it  is  the  generality  that  these  troub- 
h'S  are  an  incident  of  our  civilization.  A  meaningless 
platitude,  unless  we  show  how  they  arc.  This  I  have 
endeavored  to  do.  I  have  at  the  same  time  shown  that 
my  theory  bears  the  crucial  test  <jf  truth;  i.  e.,  agree- 
ment with  observed  phenomena.  It  is  in  nc)  place  out 
of  harmony  with  observed  facts. 


CHAPTER   XXIII. 

Historical  Testimony— The  wrong  of  interest-taking  always  recognized  by 
thinkers— Tlie  Mosaic  law— Objections— The  Greeks— The  Romans— The 
mediaeval  Church— The  early  Church— Europeof  the  Middle  Ages— Reformers 
and  usury — Shakespeare's  idea — The  Jews  and  the  movements  against  them  — 
Legislation— Penal  statutes— Prohibitive  statutes— The  statute  of  Queen  Anne— 
France— General  conclusions— Objections— The  fact  of  a  thing  having  existed 
no  proof  of  its  righteousness. 

^^  Truth  crushed  to  earth  will  rise  again.'^ 

Persons  may  pronounce  it  strange  that' the  world  has 
waited  until  this  day  and  generation  to  discover  the 
evil  of  interest-taking.  The  fact  is,  it  has  not.  Many 
important  discoveries  have  been  put  off  until  the  nine- 
teenth century,  but  this  is  not  one.  Although  the  evil 
was  detected  it  was  never  explained,  and  hence  people 
foolishly  came  to  the  conclusion  that  it  was  imaginary. 

From  the  earliest  dawn  of  history,  we  find  the  most 
advanced  thinkers  and  law-givers  combating  usur}^ 
which  term  until  recently  was  used  to  designate  the 
taking  of  all  increase.  It  was  fought  in  every  civilized 
state.  It  was  the  ruin  of  more  nations  than  all  other 
causes  put  together. 

By  the  Mosaic  law,  usury  was  strictly  and  unequivo- 
cally forbidden.  Deut.  XXIII.  19:  ^'Thou  shalt  not 
lend  upon  usury  to  thy  brother,  usury  of  victuals,  usury 
of  money,  usury  of  anything  that  is  lent  upon  usury," 
This  is  sweeping  enough  to  meet  any  case.  But  in  the 
next  verse  the  law-giver  goes  on:  ''To  a  stranger 
thou  mayest  lend  upon  usury,  but  to  thy  brother  thou 
shalt  not  lend  upon  usury,  that  the  Lord  thy  God  may 
bless  thee  in  all  that  thou  settest  thy  hand  to  in  the 
land  whither  thou  goest  to  possess  it." 

The  latter  passage  is  taken  by  some  to  break  the  force 
of  the  interdict  of  the  former,  but  it  will  bear  no  such 
interpretation.  The  believing  Jew  has  always  consid- 
ered his  own  people  his  brothers  and  all  others  as  differ- 
ent beings,  having  no  rights  which  a  Jew  is  called  upon 

140 


A  BEEED  OF  BARREN  METAL  141 

to  respect.  All  beside  the  chosen  race  are  delivered 
into  the  hands  of  the  elect  for  their  special  benefit,  and 
are  therefore  fit  subjects  for  all  sorts  of  extortion.  The 
modifying  clause  is  but  an  index  of  early  Jewish  char- 
acter. If  it  were  otherwise  it  could  not  belong  to  a 
people  among  themselves  the  most  just  on  earth,  to 
others  the  most  unscru])ulous  and  vindictive. 

And  it  was  not  the  law-givers  alone  who  looked  as- 
kance on  usury.  The  populace  were  in  full  sympathy 
with  these  laws.  We  read  in  Xehemiah  V.  7:  "Then 
I  consulted  with  myself,  and  I  rebuked  the  nobles  and 
the  rulers  and  said  unto  them,  Ye  exact  usury,  every 
one  of  his  brother,  and  I  set  a  great  assembly  against 
them."  And  further  on  he  continues:  "I  likewise  and 
my  brethren  and  servants  might  exact  of  them  money 
and  corn;  I  pray  you  let  us  leave  off  this  usury."  Still 
further  on  he  says:  "Restore  the  hundredth  part  of 
the  money,  the  oil  and  wine  which  you  exact  of  them." 

The  last  passage  ettectually  disposes  of  those  who 
hold  that  the  early  Jewish  law  permitted  the  taking  of 
some  increase  but  condemned  excessive  usury.  One 
per  cent  is  as  small  an  increase  as  we  could  consider  at 
this  age  of  the  world,  yet  the  prophet  condemned  it. 
He  was  an  authoritative  interpreter  of  the  law. 

Tiie  Jews  placed  the  usurer  in  the  catalogue  of  the 
hopelessly  incorrigiide,  and  in  Psalms  XV.  5  it  enu- 
merates among  those  who  may  be  appealed  to:  "He 
that  putteth  not  out  his  money  to  usury  nor  taketh  re- 
ward against  the  innocent;  he  that  doeth  these  things 
never  shall  be  moved." 

Proverbs  says:  "He  that  by  usury  and  unjust  gain 
increaseth  his  substance,  he  shall  gather  it  for  them 
that  siiall  pity  the  poor."  Even  the  giving  of  usury  is 
condemned  l)y  the  prophets,as  Isaiah  says:  "The  Lord 
makctli  the  earth  <'inpty,  as  with  the  taker  of  usury,  so 
with  the  givf-r  of  usury  to  him." 

Jeremiali  look<;d  u[)on  usury  as  a  crinm  worthy  of 
divine  visitation,  for  ni  his  laim-nlationH  he  sarys: 
"Woi"  is  m<',  my  mother,  that  thou  hast  l)orne  me  a  man 
«)f  strif"'  and  a  man  of  contention  to  ihcwiiole  earth;  1 
have  neither  lent  on  usury  nor  men  have  lent  to  me  on 
usury;  yet  everyone  of  tlu'in  <h)th  (uirse  mi.'." 


142  A  BREED  OF  BARREN  METAL 

Ezekiel  numbers  among  the  just  who  shall  live:  ''He 
that  hath  not  given  forth  upon  usury,  neither  hath 
taken  any  increase." 

The  unjust  son  is  he  "that  hath  given  forth  upon 
usury  and  hath  taken  increase."  The  just  son  is  he 
that  hath  not  received  usury  nor  increase. 

The  wicked  city  is  thus  addressed  by  the  prophet: 
"Thou  liast  taken  usury  and  increase,  and  thou  hast 
greedily  gained  of  thy  neighbors  by  extortion." 

We  rind  running  through  the  whole  Bible  story  of  the 
Jews  a  thread  of  policy  against  usury,  yet  we  find  that 
in  the  days  of  Nehemiah,  the  taking  of  usury  on  mort- 
gages made  in  years  of  short  crops  had  reduced  a  por- 
tion of  the  population  to  slavery,  and  that  he  appealed 
to  the  people  and  abolished  usury,  even  to  the  taking 
of  a  hundredth  part.  The  history  of  the  Jews  was  like 
that  of  other  nations,  but  they  were  wise  enough  them- 
selves to  learn  the  lessons  of  history  and  to  abolish  the 
principle,  the  most  potent  in  bringing  about  internal 
disorders  in  the  state.  The  constant  reference  to  usury 
in  the  Old  Testament  shows  it  to  have  been  a  question 
of  the  utmost    importance  among  the  Jews. 

On  the  other  hand  they  well  understood  the  power  of 
usury  in  appropriating  the  substance  of  other  peoples, 
and  in  all  ages  have  by  this  means  controlled  the 
finances  of  the  world.  The  breed  of  barren  metal  act-';" 
ing  through  the  Kothschilds  of  to-day  is  the  governing 
power  of  the  civilized  world. 

Greece  early  felt  the  power  of  usury.  Having  experi- 
enced the  impossibility  of  having  all  their  demands  sat- 
isfied by  the  productive  activity  of  the  laborers  of 
ancient  times,  and  not  satisfied  with  the  substantial 
benefits  of  slavery  without  its  responsibility,  the  usurers 
of  ancient  Greece  contracted  that  the  persons  of  their 
debtors  should  stand  as  security  for  debts.  In  that 
way  we  find  that  at  the  time  of  Solon  the  former  in- 
dependent proprietors  of  Athens  had  lost  all  of  their 
property  to  the  rich  and  were,  to  a  great  extent,  en- 
Tjlaved  through  the  taking  of  usury.  Interest-taking 
had  given  all  the  power  in  the  state  to  a  small  plutoc- 
racy.    Solon,  or  the  laws  attributed  to  him,   cut  the 


A  BREED  OF  BARREN  METAL  148 

Gordian  knot  by  canceling  all  debts  founded  on  the  se- 
curity of 'land  or  the  person  of  the  debtor, and  providing 
against  arrearages. 

The  history  of  Sparta  is  similar  to  that  of  Athens. 

While  combating  the  etfects  of  usury,  the  Greeks  did 
not  seem  to  understand  clearly  its  ethical  status.  Aris- 
totle accounted  for  the  wrong  of  usur}'  by  the  barren- 
ness of  money.  Had  he  gone  a  step  further  and  ex- 
plained it  by  the  barrenness  of  all  wealth,  he  would  have 
stated  a  truth  that  never  could  have  been  successfully 
controverted.  Those  who  contend  with  him  try  to  show 
that  other  sorts  of  wealth  are  not  barren,  Init  their  con- 
tention is  so  thoroughly  fallacious,  that  it  is  a  wonder 
that  it  ever  passed  current  with  disinterested  thinkers. 
A  flock  of  sheep  left  to  the  merciesof  their  natural  ene- 
mies would  not  be  wealth  at  all.  Neither  would  they 
increase  to  any  extent.  It  is  the  labor  of  their  care 
which  keeps  them  immediately  useful  for  satisfying  the 
wants  of  man, and  therefore  wealth.  In  a  wild  state  it 
would  be  the  labor  of  hunting  them  which  would  make 
them  available.  There  is  no  increase,  no  wealth  with- 
out labor. 

Rome  had  an  experience  similar  to  that  of  Greece. 
The  sturdy  yeomen  of  earlier  Rome  became,  through 
usury,  hopelessly  in  debt  to  their  richer  neighbors.  The 
legislation  of  the  twelve  tables  was  intended  to  meet 
this  evil,  but  failed,  and  the  free  Roman  farmer  was 
destroj'ed.  Many  of  them  were  reduced  to  slavery.  So 
pitiless  were  the  usurers  of  Rome  that  the  war  tax  of 
►Senna  increased  six  fold  m  fourteen  years.  When  Cicsar 
came  into  power,  he  practically  adopted  the  legislation 
of  Solon,  but  whether  not  enforced  or  inadequate,  it  fi- 
nally failed  of  success.  While  in  the  city  of  Rome  in- 
terest was  but  four  per  cfnt,  in  the  jjrovinces  it  rose  as 
liigh  as  twenly-five  or  thirty  per  cent.  Justinian  fixed 
the  rate  of  interest  at  six  per  cent  and  made  arn^ars 
non-c(dlectible,  but  after  a  time,  we  find  the  usurers 
ruling  and  the  working  people  of  the  nation  falling  into 
tlecay.  This  was  the  first,  as  well  as  the  last,  ste])  in 
the  <lownfall  of  the  Roman  empir<',  Rome  is  an  exam- 
ple of  power  without  ccjnscicnce,  carrying  within  it  the 


144  A  BREED  OF  BARREN  METAL 

seeds  of  its  own  destruction.  A  great  natiqii  can  no 
more  be  maintained  on  wrong  than  a  temple  can  be 
built  on  sand.  Usury  is  the  greatest  industrial  wrong 
ever  perpetrated. 

Usury  was  always  a  crying  evil  in  Rome.  Many  of 
the  great  leaders  spoke  most  vigorously  against  it.  It 
was  said  to  be  the  cause  of  the  greater  portion  of  the 
sedition  and  discord  which  perturbed  the  state.  Cicero 
says  that  wlien  Cato  was  asked  his  opinion  of  usury, 
he  made  a  Yankee-like  response  by  asking  the  question- 
er's opinion  of  murder.  Seneca  and  Plutarch  tire  both 
recorded  as  inveighing  against  it,  and  Tacitus  notices 
its  mischief  to  the  state.  To  the  time  when  usury  lorded 
among  thousands,  Rome  dates  its  decline. 

At  times  in  Rome  the  taking  of  usury  was  treated  as 
an  aggravated  species  of  theft  and  punished  accordingly. 
There  are  instances  of  the  death  penalty  having  been 
inflicted  for  tlie  taking  of  usury.  This  ridiculously 
severe  punishment,  to  be  sure,  served  no  useful  purpose, 
but  rather  served  to  bring  about  a  revulsion  in  favor  of 
the  persons  against  whom  it  was  directed. 

There  is  but  one  moral  from  Roman  financial  history: 
The  Romans  failed  to  destroy  the  taking  of  usury  and 
usury-taking  destroyed  Rome. 

There  are  several  reasons  v/hy  the  ancient  laws 
against  usury  were  not  effectivet  The  money  of  the 
ancients  was  founded  on  a  metallic  standard  entirely, 
and  with  such  a  standard  it  is  impossible  to  prevent 
interest-taking  completely.  Judges  became  venal  and 
failed  to  enforce  the  law  or  connived  at  its  violation. 
The  persons  most  influential  in  government  were  most 
benefited  by  the  taking  of  usury,  and  the  people  who 
were  filched  from  were  too  ignorant  to  understand  the 
situation  or  an  adequate  remedy  for  the  trouble.  The 
latter  principle  is  found  to  be  at  the  bottom  of  the  per- 
petuation of  all  abuses  which  have  cursed  the  nations 
of  the  earth.     But  more  of  this  hereafter. 

Without  going  into  the  history  of  usury  in  detail,  we 
may  say  that  it  has  been  fought  continuall}'  down  to 
the  present  time.  The  community  of  interest  of  the 
early  Christians  strictly  forbids  it.      Of  the  fathers  of 


A  BREED  OF  BARREN  METAL  145 

the  church,  we  tind  St.  Ambrose,  St.  Augustine  ami 
Leo  the  Great  vigorously  preaching  against  it.  St.  Ber- 
nard made  an  enthusiastic  crusade  against  it.  Pope 
Alexander  III.  joined  in  condemning  it.  Luther 
roundly  and  characteristically  scored  the  usurer.  Me- 
lancthon,Beza,  Musculus,  were  all  counted  among  its 
enemies.  With  few  exceptions,  churchmen  opposed  it 
down  to  the  sixteenth  century,  and  for  a  much  longer 
period  many  of  the  leaders  in  church  and  state  were 
unalterably  opposed  to  it. 

So  bitter  were  the  English  populace  against  the 
usurer,  that  from  the  time  of  Alfred  down  to  the  thir- 
teenth century,  detected  usurers  were  often  mobbed  and 
roughly  handled.  Thestatutn  of  Merton,  passed  1235, 
was  the  first  formal  English  law  against  it,  although  it 
was  an  indictable  offense  at  the  common  law.  In  th(> 
latter  portion  of  that  century,  the  Jews  were  expelled 
from  England  for  their  usury-taking  propensities.  In- 
deed, this  trait  of  the  Jews  accounted  for  much  of  tln' 
harsh  treatment  which  they  received  at  the  hands  of 
mediaeval  Christians.  Shakespeare  powerfully  sets  forth 
this  truth  in  the  "Merciiant  of  Venice."  It  is  an  excel- 
I'lMit  mirror  of  the  times,  and  Antonio,  "who  neither 
lends  nor  borrows  by  giving  nor  by  taking  of  excess,'' 
is  a  type  of  the  honorable  merchant  prince  of  the  Mid- 
dle Ages. 

Thr<jugh  all  of  the  writings  of  the  immortal  bard  we 
find  usury  held  ^up  to  public  scorn.  In  "Lear"  the 
usurer  hanging  the  cozener,  is  cited  as  one  of  the  grim 
ironies  of  civilization.  This  is  reason  and  impertinency 
mixed.  We  find  the  usurers  spoken  of  in  ''Timon  of 
vNthens"  as  "bawds  between  gold  and  want."  In  th<' 
"Winter's  Tale"  we  find  the  usurer  spoken  of  in  the 
most  contemptible  manner.  Indeed  the  works  of  Shake- 
speare bristle  with  references  to  the  wrongs  of  usury. 
Bacon  voices  the  same  ideas. 

As  the  Jews  were  hated  for  usury-taking,  so  they 
hated  the  Christians,  for  trying  to  ruin  their  trade  in 
breed  of  barren  metal.  It  was  because  Antonio  lent 
out  money  gratis  "and  brings  down  the  rate  of  usance 
iiere  in  Venice"  that  Shylock  wished  tocatchhim  once 
upon  the  hip.      Shyloek  and  Anton i<j   are  types. 


146  A  BREED  OF  BARREN  METAL 

So  strong  was  the  sentiment  against  the  taker  of  in- 
crease that  for  a  time  he  was  denied  consecrated  ground 
for  burial.  Dr.  Wilson,  a  writer  of  this  time,  rather 
naively  but  savagely  writes:  "For  my  part  I  will  wish 
some  penall  lawe  of  death  to  be  made  against  these 
usurers,  as  well  as  against  theeves  and  murlherers,  for 
they  deserve  death  much  more  than  these  men  doe;  for 
these  usurers  destroi  and  devour,  not  onlie  whole  fam- 
ilies, but  also  whole  countries  and  bring  folke  to  beg- 
gerie  that  have  to  doe  with  them." 

The  laws  did  not  go  so  far  as  that.  There  were  severe 
penalties,  however, attached  to  the  taking  of  usury,  and 
they  served  as  a  more  or  less  eflective  restricting  influ- 
ence. The  first  penal  statute  against  usurers  was  that 
of  Edward  III.  It  provided  for  forfeitures  and  restric- 
tions. It  was  followed  by  still  more  rigorous  laws,  and 
still  others  were  passed  in  the  reign  of  Henry  VII,  A 
penalty  of  100  pounds  was  attached  by  the  latter  to  the 
crime  of  usury,  as  well  as  forfeiture  of  the  principal  and 
a  depriving  of  the  usurious  lender  of  the  privilege  of 
again  engaging  in  the  business. 

The  statute  of  Henry  VIII.  was  the  first  to  treat 
usury  as  the  taking  of  excessive  interest,  and  by  this 
law  lenders  were  allowed  to  collect  not  more  than  ten 
per  cent  for  their  money.  Statutes  in  the  same  line 
were  passed  ujd  to  the  reign  of  Anne  and  iiUerest  thus 
gradually  reduced  to  five  per  cent.  The  statute  of  Anne 
was  an  esjjecially  strict  law  and  seems  to  have  been 
carefully  administered  with  a  view  of  enforcing  its  pro- 
visions, and  to  have  been  very  effective  in  the  sujjpres- 
sion  of  the  taking  of  interest  beyond  five  per  cent. 

The  laws  passed  since  the  time  of  Anne  have  been  in 
the  direction  of  relaxing  the  strictness  of  the  earlier 
statute  of  usury,  and  in  England  and  all  countries 
using  English  law  as  a  basis, the  laws  against  excessive 
interest-taking  have  been  greatly  modified  in  that  direc- 
tion. The  statute  was  modified  in  England,  not  because 
it  was  ineffective,  but  because  it  was  rather  too  eflect- 
ive  and  did  not  agree  with  the  theories  of  the  leaders 
of  English  thought. 

France  had  an  experience  similar  to   England,  and 


A  BREED  OF  BARREN  METAL  147 

the  policy  of  that  couutiy  was  lirst  in  the  direction  of 
.suppressing  iisurv  altogether,  and  then  toward  allowing 
it  to  a  limited  extent,  under  the  term  of  interest.  Here, 
as  in  England,  the  effectiveness  of  the  law  was  deter- 
mined by  the  intelligence  displayed  in  its  drafting,and 
the  zeal  of  judges  in  enforo'ing  the  law.  It  is  a  notori- 
ous fact  that  everywh  :re  the  usurers  are  the  persons 
who  most  loudly  declaim  against  the  etTectiveness  of 
laws  against  usury. 

This  very  general  sketch  serves  to  show  that  usury 
has  always  been  questiontid  by  som3  (jf  the  best  minds 
of  the  world,  and  it  was  only  in  a  civilization  where 
material  prosperity  of  a  few  was  more  important  than 
justice  to  the  m.xny,  that  usury  was  finally  sanctioned 
by  law.  Laws  are  usually  an  embodiment  of  the  in- 
terests, supposed  or  real,  of  the  persons  in  control  of 
government,  modified  by  a  few  concessions  to  the  mul- 
titude. The  concessions  to  the  multitude  in  several  of 
the  above  cases  were  the  legal  straws  against  usury. 

The  fact  that  usury  was  banned  by  law  under  a  civi- 
lization seemingly  lower,  and  recognized  by  law  under 
a  civilization  seemingly  higher,  proves  nothing  as  to 
the  ethical  right  or  wrong  of  the  custom.  There  are 
numerous  laws  founded  on  wrong  which  are  now  and 
have  ever  been  tolerated.  We  find  slaver}'  a  recognized 
institution  in  all  the  nations  of  the  world.  It  was  suj)- 
ported  and  upheld  by  law,  down  to  the  middle  of  the 
nineteenth  century,  in  countries  most  advanced  in  civ- 
ilization, yet  no  on»j  would  have  the  hardihood  to  say 
that  slavery  is  right.  It  may  l)e  intrcjduced  again,  yet 
that  will  ncjt  prove  it  right.  The  slavery  brought  about 
by  interest-taking  is  just  as  worthy  of  C(jndemna- 
tion.  Tin*  most  audacious  will  not  for  a  moment  assert 
that  war  is  right  in  itself.  Its  utility  to  the  world  could 
not  be  estal)lished  by  a  liljrary  of  argument,  yet  the 
laws  of  all  nations  recognize  war,  and  war  is  the  rahon 
iVelre  of  many  governments.  Man  prides  himself  on 
being  civilized,  a  being  of  superior  intellect  and  senti- 
ments, and  shudders  at  tales  of  cruelty  in  beasts;  but 
neither  the  jackal,  the  lion,  the  tiger  or  the  wolf  have 
ever  shown  such  utter  savagery  and  unreasoning  cruelty 


148  A  BREED  OF  BARREN  METAL 

as  the  glorious  soldier  of  the  civilized,  Christianized 
nations  of  to-day.  Their  law-sanctioned  action  wonld 
be  considered  outrageous,  judged  by  the  standards  of 
the  most  blood-thirsty  beasts.  One  might  till  volumes 
with  a  catalogue  of  wrongs  which  obtained  the  persist- 
ent sanction  of  law.  Every  generation  has  the  right  to 
examine  all  that  has  been  handed  down  to  it  and  to 
verify  for  itself  the  conclusions  of  those  gone  before.  It 
is  not  only  a  right  but  a  duty,  for  on  this  depends  all 
progress.  On  ethical  progress  must  depend  all  lasting 
material  progress.  Overturned  and  demolished  idols 
are  the  milestones  on  the  highway  of  ethical  progress. 
No  legal  sanction  can  sanctify  a  wrong  and  no  amount 
of  popular  or  political  combination  can  make  false  the 
true  and  right.  If  all  the  philosophers  and  mathe- 
maticians who  haveever  lived  should  come  in  long2:)ro- 
cession  and  declare  that  half  of  an  object  was  greater 
than  the  whole,!  should  say, "Avaunt, idiots,  you  speak 
falsely!"  The  truth  which  I  have  been  affirming  rests 
on  as  secure  a  basis,  and  we  can  afford  to  fly  in  the  face 
of  convention  in  asserting  it.  But  as  I  have  shown,  the 
opposers  of  usury  are  not  solitary.  Not  only  have  the 
best  laws  of  the  best  peoples  been  directed  against,  it, 
but  a  long  line  of  thinkers  from  Aristotle  to  Proudhon 
have  sought  to  open  the  the  eyes  of  the  people  to  the 
wrong  of  interest-taking.  It  was  only  because  they 
failed  to  understand  fully  the  absurdity  implied  by  the 
foundation  principle  of  interest,  that  they  failed  of 
their  purpose. 


CHAPTER  XXIV. 

Accumulated  Wealth— It  may  be  used  as  a  means  of  exacting  interest — The 
necessity  of  borrowing — Millions  born  into  the  world  without  wealth — Tools  and 
machinery  scarcely  less  necessary  than  land — The  necessity  of  borrowing  in 
the  commercial  world — Interest-takers  control  the  currency — Glut  and  over- 
production— Supply  and  demand — Illustrations. 

'To  him  ivJio  has  shall  it  be  given." 

In  the  light  of  ethics,  history  and  economics,  inter- 
est-taking is  indefensible.  It  has  from  the  earliest  his- 
tory been  the  bane  of  civilization,  it  still  remains  the 
leaven  of  discord  and  destruction.  The  problem  is  how 
to  destroy  interest-taking.  In  determining  what  makes 
interest-taking  possible,  we  may  arrive  at  a  method  by 
which  the  practice  ma}'  be  destroyed. 

The  necessity  of  borrowing  wealth  for  use  in  industry, 
gives  to  those  persons  who  have  accumulated  surplus 
the  opportunity  to  exact  interest.  When  interest  is 
once  exacted,  it,  by  its  principle  of  geometric  increase, 
keeps  the  lender  in  position  to  exact  continued  interest 
and  the  borrower  under  the  necessity  of  contracting 
continued  loans.  Borrowing  is  made  necessary  by  the 
progress  of  civilization  in  the  present  lines;  by  the 
present  financial  system,  by  the  present  basis  of  money. 

Millions  are  l^orn  into  the  world  every  year.  They  have 
wants  whicli  must  be  provided  for.  The  gratuitous 
gifts  of  nature  are  not  sufficient  to  support  in  ease  tlie 
teeming  millions  of  the  earth.  Population  has  increased 
to  such  an  extent  that  its  wants,  liorn  (»f  civilization 
and  the  necessities  of  the  climate  into  which  its  increas- 
ing numbers  have  driven  the  human  family,  cannot  be 
8upl)li(;(l  even  l)y  the  etl'orts  of  unaided  man  dir(;cted  to 
the  fr(!e  gifts  of  nature.  The  best  mcithods,  tli(i  ln'st 
machinery  must  l)e  employed  by  every  individual  it'  Ik^ 
would  succ<(,'(l  among  the  increasing  inultilude,  in  the 
ever  fiercer  struggle  for  existence. 

140 


150  A    BREED    OF    BAtiREN"    METAL 

Tools  and  machinery  are  as  necessary  to  modern  in- 
dustry as  is  land.  Without  them,  we  should  not  have 
modern  industry  but  the  crude  methods  of  the  savage. 
The  laborer  with  the  spade  and  reaping-hook  cannot 
compete  with  the  laborer  with  the  gang-phnv  and  binder. 
The  power-press  daily  has  driven  tho  haiKl-pross  sheet 
to  the  wall.  The  power-loom  and  the  spinning  machine 
have  driven  out  the  distaff  and  the  hand-loom.  The  cot- 
ton-gin replaces  the  hand-picker,  the  thresher  the  flail, 
the  roller-mill  the  mortar,  the  steamboat  the  oar,  the 
telegraph  the  courier.  If  one  have  not  these  tools  he 
must  borrow  them  or  wealth  to  trade  for  them,  or  he 
must  work  for  another,  just  as  surely  as  he  must  work 
for  another  if  he  have  not  access  to  land.  It  is  only 
by  intelligent  labor  with  the  best  appliances  that 
mother  earth  can  be  prevailed  upon  to  satisfy  the  needs 
of  the  millions  who  swarm  up(Mi  her  breast. 

The  majority  of  those  born  to  the  earth  have  not  the 
implements  of  toil  and  are  therefore  constrained  to 
borrow  them,  or,  what  is  the  same  thing,  work  for  an- 
other and  give  him  the  profits  of  their  toil,  retaining 
for  themselves  bare  subsistence  only.  This  necessity 
for  borrowing  must  always  exist  to  a  greater  or  less 
extent.  Under  the  present  organization  of  industry, 
the  great  majority  of  those  who  toil  use  implements  not 
their  own,  implements  on  which  they  are  obliged  to 
pay  interest  or  capital  profit.  They  are  almost  abso- 
lutely at  the  mercy  of  those  from  whom  they  borrow. 
Subsistence  is  a  necessity  which  cannot  be  turned  aside. 
Millions  feel  that  necessity.  It  is  then  not  difficult  for 
the  holder  of  wealth  who  wishes  to  get  the  most  out  of 
his  possession  to  impose  terms  on  the  borrower,  just 
falling  short  of  pressing  him  into  destitution.  A  man 
with  starvation  staring  him  in  the  face  cannot  haggle 
about  wages,  especially  when  there  are  hundreds  of 
others  at  his  side  ready  to  work  at  the  figures  offered. 
The  man  in  need  of  money  to  pursue  his  business, 
money  which  he  must  have  or  fail  immediately,  is  not 
in  position  to  drive  a  bargain  with  the  money-lender. 
He  must  and  does  come  to  the  terms  of  the  latter. 

But  in  the  ordinary  course  of  business,  the  necessity 


A  BREED  OF  BARREN  METAL  151 

for  borrowing  does  not  depend  immediately  on  the  ne- 
cessity of  engaging  in  remunerative  toil.  The  financial 
system  of  this  country  and  all  others  renders  borrow- 
ing by  business  men  absolutely  necessary  to  carry  on 
their  occupations. 

They  must  do  it  in  order  to  gain  control  of  the 
mechanism  of  exchange,  the  vehicle  of  all  intercourse 
between  man  and  man.  Under  the  laws  of  interest  and 
rent  the  capitalists  of  the  country,  as  such,  each  year 
receive  an  amount  of  wealth  so  large  that  they  are  able 
to  save  from  it  a  sum  greater  than  the  yearly  net  in- 
crease of  the  wealth  of  the  nation.  It  is  theirs,  they 
may  do  with  it  as  they  see  fit.  If  capitalists  conclude 
to  hoard  their  wealth,  that  which  they  receive  each 
year  is  doubly  sufficient  to  command  all  of  the  circulat- 
ing medium  of  the  country.  Interest  and  capital  profits 
are  contracted  for  in  money;  money  is  the  only  form 
in  which  wealth  can  be  hoarded  without  loss.  It  is 
money,then,that  the  capitalist  will  naturally  demand. 
From  his  position  at  the  head  of  the  principal  financial 
institutions  of  the  country  and  his  intimate  relations 
with  all  others,  he  is  in  position  to  command  the  money 
which  he  wishes.  The  capitalist  is  then  placed  in  con- 
trol of  the  currency  of  the  country.  He  may  withdraw 
it  from  circulation,  and  the  only  way  in  which  it  can 
be  restoreul  is  by  borrowing  from  him  at  substantially 
his  own  terms.  But  money  represents  wealtli,  and  l)y 
taking  the  money  from  circuhition  the  capitalist  ties 
up  in  the  hands  of  producers  wealth  equal,  at  least,  to 
the  face  value  of  the  money  which  he  controls  and 
hoards.  In  i)ractice,  he  actually  ties  up  several  times 
that  amount  of  wealth,  for  a  given  amount  of  money 
is  usually  capable  of  supplying  a  medium  for  the  trans- 
action of  exchanges  to  many  times  its  face  value. 

That  such  is  the  effect  of  hoarding  money,  no  one 
knowing  the  elements  of  economic  science  will  attempt 
to  (lisi)ute.  It  is  not  necessary  to  go  into  an  argument 
here  to  establish  its  truth.  J.  S.  .Mill  has  conclusively 
proved  that,  under  normal  condit ions,  demand  and 
supply  ar<' efpuil  and  that  production  is  the  cause  of 
demand.     Demand,  says  Mr.  .Mill,  implies  the  wish  for 


152  A  BREED  OF  BARREN  METAL 

an  article  and  the  ability  to  purchase  it.  The  produc- 
tion of  the  equivalent  of  the  article  desired  or  the  tak- 
ing of  that  equivalent  from  him  who  has  produced  it, 
is  the  only  means  by  which  the  second  condition  of 
effective  demand  can  be  fulfilled.  Evidently  the  per- 
sons who  pay  the  billions  collected  annually  for  rent, 
interest  and  capital  profits,  deprive  themselves  by  just 
that  amount  of  the  ability  to  purchase, and  there  is  just 
that  much  less  effective  demand  for  articles  used  by  the 
productive  toilers.  Then  the  amount  which  capitalists 
decide  to  hoard  is  rei:)resented  by  goods  on  the  market 
for  which  there  is  no  demand.  This  wealth  which  the 
hoarded  money  called  for,  is  being  cared  for  by  others 
who  are  obliged  to  bear  its  deterioration  and  the  risk 
of  holding, and  the  capitalist  can  afford  to  wait.  He  is 
master  of  the  situation.  He  has  the  ability  to  purchase 
but  not  the  desire,  and  other  people  who  have  the  desire 
to  demand  the  goods  on  the  market, but  have  deprived 
themselves  of  the  ability  to  do  so  by  the  jDayment  of 
unearned  incomes  to  the  capitalist,  must  secure  that 
right  by  borrowing  back  at  the  terms  of  the  capitalist 
the  ability  to  purchase.  If  they  do  not  do  this  they 
must  look  upon  glutted  markets,  languishing  trade, 
suspended  industries,  idle  laborers  and  starving  multi- 
tudes. These  are  the  indications  that  the  active  toilers 
of  the  country  can  no  longer  meet  the  conditions  im- 
posed upon  them  by  the  lending  capitalist,  or  that  the 
latter  prefers  to  hold  on  to  his  unearned  gains  until 
the  industries  deranged  by  his  inordinate  demands  are 
placed  on  a  normal  footing,  and  there  is  less  risk  of 
loss.  He  waits  until  the  panic  has  passed  its  acute 
stage,  and  then,  like  the  tardy  doctor,  offers  his  medi- 
cine when  the  patient  has,  of  his  own  resources,  recov- 
ered his  normal  conditions  or  is  beyond  aid.  If  interest 
and  rent  were  not  collectible  by  private  parties,  the 
fund  which  they  represent  would  be  in  the  hands  of 
the  active  toiler,  suppl}^  and  demand  would  always 
remain  equal,  there  would  be  no  stagnation,  "glut," 
or  "overproduction,"  laborers  would  be  steadily  em- 
ployed. 

When  a  toiler  produces  an  article,  he  does  so  because 


A  BREED  OF  BARREN  METAL  loB 

he  wishes  to  consume  that  article  or  to  trade  it  for 
something  to  consume.  The  toiler  with  whom  he  trades, 
if  he  trade  directly,  produces  what  he  does  with  the 
express  purpose  of  supplying  the  demand  of  the  first 
toiling  producer.  By  the  act  of  producing  each  creates 
a  demand  for  what  the  other  produces.  The  demand 
is,  in  each  case,  just  equal  to  the  amount  produced. 
But  this  is  all  upset  by  the  non-producer  coming  in 
and  taking  a  share  of  tlie  production.  He  deprives  the 
producer  to  that  extent  of  effective  demand  and  makes 
the  goods  which  his  fellow-producer  creates  for  him  a 
drug  on  the  market.  The  interest-taker  has  the  effective 
demand  which  formerly  belonged  to  the  toiler,  but  he 
is  usually  obliged  to  us6  but  a  portion  of  it,  and  the 
rest  allows  the  goods  intended  to  supply  it  to  become  a 
drug  on  the  hands  of  their  producers.  Then  the  wants 
of  the  interest-taker  are  not  the  same  as  those  of  the 
toiler,  and  other  sets  of  toilers  are  put  to  work  on  other 
industries  to  supply  the  wants  of  the  taker  of  unearned 
incomes.  So  far  as  the  great  body  of  productive  workers 
are  concerned,  the  goods  made  to  supply  the  takers  of 
unearned  incomes  are  a  total  loss. 

If  Jack  manufactures  shoes  which  he  wishes  to  trade 
for  William's  flour  and  Henry's  meat,  it  is  to  the  inter- 
est of  William  and  Henry,  as  well  as  Jack,  that  he  re- 
tain all  of  the  shoes  which  he  manufactures  to  trade 
for  their  flour  and  meat.  For,  if  a  portion  of  the  shoes 
are  taken  from  Jack  in  unearned  charges,  that  leaves 
him  able  to  l)uy  just  that  mucli  less  flour  and  meat. 
Tlie  taker  of  these  unearned  charges  may  or  may  not 
buy  flour  and  meat  to  the  extent  which  Jack  would 
have  done  had  he  retained  his  whole  product,  but  as  a 
matter  of  fact,  he  does  not.  Then  when  we  consider 
that  a  like  amount  is  taken  from  Henry  and  William, 
we  see  that  the  production  of  each  gives  him  effective 
demand,  diminished  by  just  the  amount  taken  from 
him  in  uufariH'd  incomes,  and  the  toilers  as  a  body  are 
WDrse  off  by  just  the  aggregate  anion nt  1ak<'ii  from 
th'im  in  unearned  incomes. 

The  hiw  of  su])ply  and  demand  will  work  only  whert* 
every  one  retains  his  own.    In  an  econumic  organization, 


164  A  BREED  OF  BARREN  METAL 

where  a  few  are  allowed  to  take  a  portion  of  the  sub- 
stance of  the  many  Avithoiit  giving  value  received,  the 
law  is  modified  and  its  effect  appears  distorted.  The 
law  of  organisms  is  to  develop  to  maturity,  yet  igno- 
rance or  casualty  makes  many  individual  organisms 
abortive,  and  kills  many  others  in  an  undeveloped 
state.  Just  so  the  wrongs  of  our  economic  organism  so 
modify  the  natural  laws  governing  it  that  the  law  that 
supply  is  equal  to  demand  and  that  production  is  the 
cause  of  demand,  is  distorted,  demand  becoming  the 
cause  of  production  and  the  supply  and  demand  being 
so  poorly  balanced  that  we  have  glutted  markets  in  the 
midst  of  starvation,  and  idleness  on  the  threshold  of 
poverty.  The  business  of  the  statesman  of  to  day  is  to 
remove  the  artificial  modifications  of  natural  law  and 
allow  our  suffering  industries  to  reassume  their  natural 
equilibrium. 


CHAPTER    XXV. 

Our  Currency  System— The  etfect  of  hoardint;  continued- -How  it  cripples  in- 
dustry—An illustration— Results— Interest  divided— Symptoms  and  causes— 
The  adaptability  of  our  present  currency  to  the  ends  of  the  usurer— Value  and 
volume — Metallic  currency  inadequate  in  volume  to  the  country's  needs- 
Figures — Volume  of  circulation  here  and  in  Europe— Gold  product  all  neces- 
sary to  supply  the  arts— Fluctuation  in  value  and  volume— Has  the  price  of 
gold  appreciated? — Silver— The  single  silver  standard— No  commodity  can  be 
made  a  non-fluctuating  money  standard— Value  and  supply  and  deuiand— Our 
currency  well  adapted  for  fluctuation— Redeemable  currency — Demonetization 
of  silver— Bimetallism— A  will-o'-the-wisp— Gresham's  law — Composite  stand- 
ard— Evils  of  fluctuation. 

The  hand  that  holds  the  dollar  is  the  poioer  that  rules 
the  world. 

The  practical  manifestations  of  financial  panic  are 
very  materially  modified  })y  our  ciirreiicy  system,  wliich 
gives  power  to  the  rent  and  interest-takers  to  control 
our  medium  of  exchange,  and  thus  tie  up  business  more 
effectively  than  could  be  doneunder  a  rational  currency 
system. 

When  the  currency  of  the  country  is  monopolized, 
the  laws  of  supply  and  demand  are  no  longer  oi)erative; 
markets  seem  to  glut  while  a  portion  of  the  inhaljitants 
of  the  country  are  on  the  verge  of  starvation.  Produc- 
tion seems  to  cease  or  drag  along,  just  at  the  time  wIkmi 
there  is  most  need  of  wealth  of  various  sorts  for  the 
support  of  the  race.  It  is  possible  for  the  fiiumcial 
classes  to  monopolize  the  currency,  because  of  the  fact 
that  they  collect,  in  a  few  months,  a  suflicicnt  amount 
ill  rent  and  interest  to  equal  the  whoi(!  volume  of  cir- 
culating nu'dium.  The  basis  of  (lie  uinnopoly  is  inter- 
est-taking, but  the  monopolization  is  made  easy  by  the 
adajitability  of  the  currency  system   to  that  very  end. 

The  hf>arding  of  the  ca))italisl  at  critical  tinx's  has 
an  even  broach^r  effect.  It  dcprivf's  thr  industrial  world 
of  tlie  instrument  of  exchange  called  money.  If  a  class 
of  men  Imd  control  of  all  of  the  scales    in  the    country 


156  ■  A  BREED  OF  BARKEN  METAL 

and  refused  to  allow  them  to  be  used,  the  result  would 
be  a  serious  embarrassment  to  business.  But  money  is 
a  mechanism  much  more  necessary  to  our  exchanges 
than  are  scales.  It  enters  into  every  transaction,  both 
as  a  measure  of  value  and  as  a  means  of  transferring 
propert3^  While  the  hoarding  of  scales  would  embar- 
rass that  class  of  exchanges  only  where  the  goods  are 
sold  by  weight,  the  hoardingof  money  would  embarrass 
all  exchanges  and  virtually  paralyze  business.  Then, 
were  scales  cornered,  we  might  soon  produce  new  ones 
of  the  material  at  hand,  but  money  is  practically  a  fixed 
quantity,  probably  growing  smaller  in  proportion  to 
the  service  required  of  it.  So  close  and  exclusive  is  the 
private  government-sanctioned  monopoly  in  money, 
that  if  the  meager  supply  of  gold  can  be  cornered,  the 
law  decrees  that  the  hold-up  is  complete,  that  nothing 
else  shall  take  its  place,  and  that  the  hapless  industrial 
victims  must  submit  to  the  demands  of  the  financial 
road  agents. 

This  is  not  an  imagined  danger,  but  is  seen  to  be  very 
tangible  and  persistent  at  times  of  financial  distress. 
Everything  but  money  seems  plentiful  enough,  but  that 
is  so  scarce  that  business  refuses  to  move. 

The  explanation  is  not  difficult.  We  have  become 
accustomed  to  make  our  exchanges  with  money  and  we 
cannot  do  without  it.  It  is  necessary,  both  as  a  denom- 
inator of  value  and  a  medium  of  exchange.  Suppose, 
for  an  instant,  that  A  had  a  wagon,  B  a  horse,  C  a  pair 
of  oxen  and  D  several  sheep.  A  wishes  to  sell  his  wagon 
and  get  a  horse,  B  wants  to  sell  his  horse  and  get  a 
flock  of  sheep,  C  wants  a  wagon  for  his  oxen  and  D 
wants  a  yoke  of  oxen  for  his  sheep.  The  demands  of 
each  might  be  supplied  Avithin  the  circle,  but  as  no 
two  could  trade  directly  there  must  be  some  medium 
to  carry  on  the  exchanges,  else  great  difficulty  and  an- 
no3^ance  would  result.  Money,  then,  has  a  power  as  a 
mechanism  outside  of  and  distinct  from  its  power  as 
a  representative  of  wealth,  and  may  have  a  paralyzing 
effect  on  industry  far  beyond  the  actual  demand  rep- 
resented by  the  bulk  hoarded. 

Viewed  from  whatever  standpoint,  the  taker  of  rent 


A  BREED  OF  BARREN  METAL  157 

and  interest  or  capital  profit  has  the  key  to  the  situa- 
tion. The  financial  group  controls  the  industries  of  the 
nation.  If  industries  wish  to  proceed  they  must  bor- 
row the  mechanism  of  exchange  from  the  landlord  and 
usurer,  and  largely  on  his  own  terms.  For  in  the  loan- 
ing of  capital  we  have  the  closest  trust  in  the  world. 
The  money  combination  is  so  far-reaching  and  effective 
as  to  be  invulnerable.  The  capitalists  hold  the  fortunes 
of  the  toiling  world  in  their  hands  and  can  dictate  terms. 
What  these  terms  are  in  times  of  need  has  been  illus- 
trated in  every  financial  panic  ever  known.  In  that  of 
1893  money  was  held  at  from  ten  to  seventy  per  cent  or 
refused  altogether,  unless  to  the  gambling  class  who 
could  use  call  loans.  The  laborer  must  take  less  wages, 
the  active  business  man  less  for  the  wages  of  manage- 
ment or  superintendence,  but  the  usurer  must  have  his 
pound  of  Hesh. 

It  is  needless  in  this  connection  to  divide  interest 
into  interest  proper,  capital  profits,  etc.  After  enough 
has  been  set  aside  to  keep  up  the  capital  engaged  in 
business,  anything  tliat  is  paid  for  the  services  of  capital 
and  not  for  the  actual  personal  services  of  its  owner  is 
an  unwarranted  charge  on  industry.  It  rests  on  the 
false  principle  underlying  interest:  that  capital  has  the 
power  of  production  and  sliould  be  remunerated  there- 
for. We  have  seen  tiie  truth  of  the  proposition  laid 
down  by  .Vdain  Sniitii,  l:)ut  never  followed  to  its  logical 
conclusions:  That  the  laborer  produces  all  wealth. 
The  logical  conclusion  is  tiiat  therefore  all  wealth  is 
rigiitfully  iiis. 

We  must,  then,  l)anish  all  taking  of  increase  for  money 
lent,  and  substitute  for  the  present  metallic  currency 
a  money  whicii  cannot  be  cornered.  For  admit  the 
right  of  cai)ital  profits,  and  those  who  control  the  sur- 
plus wealth  of  the  nation  can,  by  contracts  wrung  from 
the  necessities  of  their  feUow-men,  keej)  control  of  all 
possible  net  earnings  of  the  nation's  industries  and 
therefore  all  the  curren  5y  of  the  country.  They  may 
lend  and  re-lend,  but  on  such  conditions  thai,  when 
the  day  of  reckoning  comns  they  are  in  the  sauie  ad- 
vantageous position  as  before 


158  A  BKEED  OF    BARREN  METAL 

It  is  needless  to  catalogue  instances  of  the  conditions 
to  which  attention  has  been  called.  They  are  manifested 
over  and  over  again  in  every  period  of  distress.  The 
people  have  become  so  accustomed  to  money  stringency, 
glut  of  markets,  over-supply,  suspension  of  industries, 
timidity  of  capital,  that  they  are  accustomed  to  look 
upon  these  phenomena  as  the  causes  instead  of  the 
symptoms  of  financial  disorder. 

Grave  financiers  voice  the  same  error,  seemingly  un- 
mindful that  there  must  be  a  common  cause  for  all 
these  indications  of  disease  in  the  body  industrial. 

Our  present  money  seems  especially  destined  to  be 
used  as  the  tool  of  the  usurer.  Its  adaptabilit}^  for 
cornering  and  contraction  of  volume  is  vastly  superior 
to  its  adaptability  for  any  other  purpose  whatever.  A 
glance  at  the  facts  is  sufficient  to  substantiate  these 
statemerits. 

Political  economists  hold  that  the  value  of  the  dollar 
is  inversely  proportional  to  the  number  of  dollars  in 
circulation,  the  volume  of  wealth  being  constant.  While 
it  is  doubtful  whether  the  law  is  mathematically  exact 
even  with  the  present  monetary  system,  and  while  it 
is  certain  that  it  would  not  hold  at  all  in  a  scientific 
currency  system,  experience  has  shown  that  with  a  com- 
modity money,  that  statement  approximates  the  truth. 
Prices  measured  in  money  fall  with  contraction  and 
rise  with  expansion  of  the  currency.  If  the  law  be  true, 
the  money  of  the  country  should  bear  a  fixed  relation 
to  the  wealth  of  the  country,  or  at  least  to  the  volume 
of  that  country's  exchanges.  The  volume  of  a  country's 
exchanges  depends  on  the  volume  of  that  country's 
Avealth  and  we  may  take  the  latter  as  an  approximate 
criterion  of  the  volume  of  money  required. 

Placing  the  national  wealth  of  the  United  States  at 
seventy  billions  of  dollars,  gold  basis,  and  the  money 
in  circulation  at  present  at  $1,740,000,000,*  a  recent 
estimate  of  the  Treasury  Department,  there  is  in  this 
country  one  dollar  in  currency  for  ever}'  forty  dollars 
in  wealth;  placing  the  currency  of  the  country  on  a 
metallic  basis,  as  all  clamor  for;  i.  e.,  using  our  avail- 
able stock  of  gold  and  silver  at  itspresent  money  value, 

*  The  half  billion  idle  in  the  United  States  vaults  is  not  in  circulation. 


A  BREED  OF  BARREN  METAL  159 

we  would  have  but  one  dollar  in  currency  for  every  sev- 
enty-two dollars  of  national  wealth.  Making  gold  the 
sole  money  of  the  country,  as  we  have  just  attempted 
to  do,  would  give  us  but  one  dollar  in  money  for  every 
one  hundred  forty-five  dollars  in  national  wealth.  This 
estimate  i?  made  on  a  basis  of  gold  stock  of  six  hundred 
four  millions,  and  a  silver  stock  of  six  hundred  fifteen 
millious,allo\ving  one-fifth  for  national  bank  and  United 
States  Treasury  reserves.  If  money  be  scarce  and 
prices  low  enough  to  cause  financial  embarrassment 
with  on  e  dollar  in  currency  for  every  forty  dollars  in 
national  wealth,  it  would  be  quite  out  of  the  question 
to  carry  on  business  with  one  dollar  in  currency  for 
every  one  hundred  forty-five  dollars  of  national  wealth. 
Prices  measured  in  money  would  fall  to  less  than  one- 
third  of  their  present  level,  and  it  would  require  three 
times  as  many  goods  to  pay  fixed  money  obligation  as 
it  would  have  taken  at  the  time  the  debt  was  contracted. 
The  result  would  be  fearful  to  contemplate.  The  finan- 
ciers of  the  country  would  by  one  stroke  get  control  of 
all  wealth. 

Nor  would  there  be  any  prospect  of  supplying  the 
deficiency  in  the  gold  currency.  For  the  last  decade 
our  natifjnal  wealth  has  increased  on  an  average  more 
than  two  billions  per  year.  To  maintain  the  present 
ratio  of  tlie  volume  of  currency  to  the  national  wealth 
and  hence  the  pr<jsi'nt  prices  and  conveniences  of  ex- 
change, would  require  a  yearly  addition  to  the  circulat- 
ing medium  of  about  fifty  millions  of  dollars,  which, 
with  the  proportional  reserves,  would  amount  to  sixty- 
two  and  one-half  millions  yearly.  The  entire  gold 
product  of  the  ctnuitry  is  Imt  about  thirty-three  and  one- 
half  millions  yearly.  The  coinage  i)er  year  has  so  far 
\n'nu  about  equal  in  amount,  but  there  is  no  prospect 
that  this  will  br;  allowed  to  continue.  Indeed,  if  gold 
w(;re  not  bolstr'red  up  to  sucli  a  hiti,li  ))riee  by  its  pref- 
erence as  a  money  metal,  the  entire  product  would 
be  used  in  tlu^  arts. 

We  cannot  draw  on  the  rest  of  the  world,  for  the  rest 
of  the  world  is  in  little  better  position  to  make  gold 
its  money.    Placing  th'e  wealth  of  the  world  outside  the 


100  A  BREED  OF  BARREN  METAL 

United  States  at  two  hundred  twenty-five  billions  and 
the  circulating  medium,  exclusive  of  the  gold  reserve 
of  one-fifth,  at  6,816  millions,  there  would  be  an  aver- 
age in  wealth  of  thirty-three  dollars  for  every  dollar  in 
money.  On  a  coin  basis  other  nations  would  have  an 
average  of  one  dollar  in  money  for  every  forty-four  dol- 
lars of  wealth,  and  on  a  gold  basis,  one  dollar  in  money 
for  every  ninety-five  dollars  in  wealth.  Estimating 
the  average  yearly  increase  of  wealth  outside  the  United 
States  at  four  and  one-half  billions  of  dollars,  it  would 
require  a  yearly  addition  of  one  hundred  fifty-three  mil- 
lions of  dollars  to  foreign  currency  to  maintain  the 
present  relative  volume  of  currency  and  hence  the  pres- 
ent prices  and  commercial  facilities.  But  the  entire 
gold  product  outside  of  the  United  States  was  valued 
at  but  ninety-eight  millions  of  dollars  in  1892,  and 
twelvemillions  Jess  was  coined  in  1891,  the  last  year 
for  which  I  have  figures.  Then  if  the  present  volume 
of  money  is  not  too  great,  and  all  will  agree  that  it  is 
not,  and  if  it  is  wise  to  maintain  at  least  as  great  a 
relative  volume,  an  exclusive  gold  or  an  exclusive  silver 
currency  for  the  United  States  or  for  the  world  is  quite 
out  of  the  question. 

Fluctuation  in  the  volume  of  the  currencv  means 
fluctuation  in  the  money  standard,  with  all  of  its  con- 
sequent evils.  But  a  fluctuation  in  the  money  standard 
may  occur  without  a  fluctuation  of  the  volume  of  money. 
It  must  occur  with  a  money  standard  or  value  denom- 
inator based  on  a  single  commodity.  Gold  has  never 
been  a  fixed  standard.  As  compared  with  the  whole- 
sale prices  at  Hamburg  of  one  hundred  staple  commodi- 
ties (as  collated  by  Dr.  Soetbeer,  the  economist),  gold 
has  appreciated  in  value  more  than  thirtv  per  cent  since 
1873.  The  "Economist's"  list  of  twenty-two  index 
articles,  giving  average  prices  in  London  for  twenty 
years,  shows  the  purchasing  power  of  gold  to  have  ap- 
preciated from  thirty-five  to  forty  per  cent  within  that 
period.  A  list  of  prices  of  standard  articles  in  New 
York  would  show  a  like  result.  This  proves  beyond  a 
doubt  that  the  gold  dollar  has  radically  appreciated  in 
irurchasing  power  and  that  its  exclusive  adoption  as  a 


A  BREED  OF  BARREN  METAL  161 

mouey  standard  would  entail  all  the  evils  of  an  appre- 
ciating currency. 

It  is  entirely  irrelevant  to  say  that  gold  has  reiliained 
stationary  and  other  things  have  fallen  in  price.  A 
just  money  standard  should  adapt  itself  to  the  average 
fall  in  prices  of  other  commodities  or  the  financial 
group  alone  will  get  the  benefit  of  improved  processes 
of  industry,  and  the  value  of  all  inventions  will  go  into 
the  pockets  of  the  money-lenders. 

Silver  having  been  a  simple  commodity,  but  a  favored 
one,  in  the  United  States  and  in  many  of  the  European 
countries  since  1873,  sympathized  pretty  fully  in  price 
with  other  commodities,  until  at  the  beginning  of  1893 
the  concerted  move  of  the  gold  forces  against  its  use  as 
a  money  metal  threw  a  large  supply  of  the  commodity 
on  the  market  and  depressed  the  price  below  the  normal 
standard.  To  be  sure,  increased  production  made  the 
fall  more  marked.  The  adoption  of  the  single  silver 
standard  would  have  the  immediate  effect  of  debasing 
the  currency  and  driving  the  gold  out  of  circulation, 
but  would  be  followed  by  a  reaction  in  which  the  price 
of  silver  would  probably  double  and  the  money  standard 
be  appreciated  to  nearly  its  present  mark.  A  single  sil- 
ver standard  would  mean  wide  fluctuation  and  conse- 
quent widespread  ruin. 

There  is  no  possibility  of  making  a  fixed  quantity  of  " 
any  commodity  a  non-fluctuating  money  standard. 
The  price  of  a  commodity  which  can  be  produced  in 
any  desired  quantities  ultimately  depends  on  the  cost 
of  production,  Init  the  supply  of  a  commodity  limited 
in  quantity,  and  the  fixed  stock  of  which  is  relatively 
large  as  compared  with  the  3'early  product,  depends  al- 
most exclusively  f)n  supply  and  demand.  The  demand 
for  money  may  at  any  time  reach  tiie  volume  of  all  of 
the  exchangcjible  wealth  in  the  country,  while  at  other 
times  it  may  be  much  less.  No  one  commodity  in  a 
country  can  erpial  all  other  couimodities,  andliencethe 
demand  for  a  coujuiodity  which  is  ne<!ded  to  represent 
all  oiluT  comuK^dities  must  exceed  1  lie  supply.  In  this 
«;ase  lh<;  jjrice  must  go  uj).  This  is  what  is  actually 
hai)penintr  everv  day.      \V(!  have  tried  to  make  hIx  huu- 


162  A  BREED  OF  BAREEN  METAL 

dred  millions  in  gold  supply  the  demand  for  two  thou- 
sand millions  in  currency.  Hence  gold  is  sought  after, 
is  scarce  and  dear.  We  could  make  lead  dear  in  the 
same  manner,  or  silver  or  any  other  commodity,  but 
not  so  rapidly,  as  the  supply  is  not  so  meager. 

A  recent  writer  has  argued  that  the  volume  of  a  com- 
modity currency  has  nothing  to  do  with  its  price.  If 
its  price  depends  on  supply  and  demand,  then  the  de- 
mand is  greater,  he  argues,  the  greater  the  volume  of 
the  currency,  and  the  price  of  a  fixed  quantity  should 
be  greater^  and  vice  verm.  It  is  not  the  alisolute  de- 
mand, or  the  demand  for  metal  to  coin  which  alone 
fixes  the  price  of  that  metal,  and  therefore  the  value  of 
the  money  standard;  but  the  volume  of  the  metal  coined 
as  compared  with  the  volume  of  the  metal  available  for 
coinage,  or  the  total  volume  of  the  metal  or  commodity 
as  compared  with  the  total  demand  for  the  commodity 
for  coinage  and  other  purposes,  which  fixes  the  price 
of  a  fixed  quantity  of  tlie  commodity,  and  hence,  the 
money  standard.  Now  the  smaller  the  volume  coined 
at  a  certain  price,  the  smaller  the  volume  available  for 
coinage  at  that  price,  while  the  smaller  the  amount  of 
the  money  commodity  coined  as  compared  with  the 
volume  of  wealth  which  it  represents,  the  greater  de- 
mand for  the  coin  and  consequently  the  greater  the 
demand  for  the  commodity  to  coin  and  the  greater  the 
value  of  the  unit.  The  relation  of  demand  to  supply 
fixes  the  price  of  the  unit.  Gold  and  silver  are  subject 
to  all  fluctuations  of  other  commodities  and  hence 
neither  can  ever  be  a  fixed  money  standard.  As  a  mat- 
ter of  fact  gold  and  silver  do  respond  to  the  law  that 
the  value  of  the  dollar  is  inversely  prop<jrtional  to  the 
volume  of  the  circulating  medium,  at  least  above  or 
below  a  certain  fixed  volume. 

It  would  be  the  same  whatever  commodity  money  we 
had.  If  lead  were  made  the  sole  money  of  the  country, 
the  demand  for  lead  for  coinage  purposes  would  greatly 
affect  the  price  of  that  commodity. 

The  law  of  supply  and  demand,  as  I  have  stated 
above,  holds  for  money  as  well  as  other  articles.  In 
this,  too,  under  normal  conditions,  supply  and  demand 


A  BREED  OF  BARREN  METAL  103 

must  be  equal.  Now, if  witli  a  certain  volume  of  money 
and  a  certain  volume  of  wealth  the  conditions  are  nor- 
mal, if  supply  and  demand  are  equal,  then  with  any 
other  volume  of  money  with  the  same  volume  of 
wealth,  supply  and  demand  must  be  unequal ;  or  the 
only  way  to  keep  \ip  the  equilibrium  is  to  make  the 
money  unit  more  or  less  valuable  This  is  what  actu- 
ally happens.  If  Jack  holds  one  hundred  dollars  and 
it  represents  a  certain  fixed  quantity  of  wealth,  each 
dollar  will  buy  one-hundredth  part  of  that  wealth.  r>et 
his  dollars  be  increased  to  two  hundred,  while  the 
wealth  which  they  represent,  or  which  can  be  piu'chased 
for  them,  remains  the  same,  and  each  dollar  held  by 
Jack  will  purchase  but  one  two-hundredth  of  the  wealth. 
In  other  words,  the  money  unit  has  lost  one-half  of  its 
value.  There  is  no  contradiction  in  the  statement  that 
the  value  of  the  money  unit  is  regulated  by  supply  and 
demand  and  also  by  the  comparative  volume  of  cur- 
rency. 

The  problem  to  be  solved  in  establishing  a  scientific 
currency  system,  is  to  devise  a  money,  the  sup])ly  of 
which  will  always  just  equal  the  demand,  and  the  value 
of  a  unit  of  which  will  therefore  always  remain  con- 
stant. No  metallic  currency  can  satisfy  these  require- 
ments. 

Indeed,  if  our  currency  were  especially  invented  for 
rapid  and  certain  fluctuation,  both  as  to  vohnne  and 
the  value  of  the  money  unit,  it  could  not  be  better  fash- 
ioned than  now.  With  a  currency  of  more  than  two 
thousand  millions  of  dollars  based  entirely  on  consid- 
erably less  than  one-third  that  amount  of  gold,  the  sys- 
tem is  more  mercurial  than  mercury  its<'If.  The  paltry 
stock  of  the  yellow  metal  is  su[)p(jsed  to  siii)])ly  I'nili'd 
States  Treasury  and  l)ank  rest^rves  and  to  rtMleein  liic 
remainder  f>f  the  curnMicv  on  presentation;  yd  it  i?^ 
l)ut  a  fraction  of  tin;  value  which  it  is  supposed  to  pay. 
How  wonderfull}'  elastic  that  h(»ard  of  gold!  Financi(3rs 
explain  the  necromancy  by  whicrh  ^old  can  support 
and  redeem  a  currency  of  three  or  four  times  its  vol- 
ume, by  saying  that  it  is  not  intended  that  the  currency 
is  to  be  jiresented  for  re(leui])tion.   That  is  to  say:     "If 


164  A  BREED  OF  BARREN  METAL 

you  don't  want  our  gold  you  may  have  any  amount  of 
it,  but  if  you  want  it,  under  no  circumstances  can  we 
let  it  go.  We  will  suspend/'  The  fact  is  that  the  ex- 
planation is  no  explanation  at  all.  Tlie  real  explana- 
tion is  that  two-thirds  to  three-fourths  of  the  currency 
of  the  United  States  is  irredeemable  paper  and  silver, 
with  the  gold  unit  as  the  money  standard. 

This  sort  of  currency  is  allowed  to  remain  because  it 
serves  the  purpose  of  the  usurer.  If  it  happens  to  be 
to  his  interest,  as  it  usually  is,  to  make  the  dollar  more 
valuable,  he  can  just  demand  gold  for  a  portion  of  the 
currency  supposed  to  be  founded  on  it;  others  will 
follow  suit.  The  price  of  the  scarce  commodity  goes 
flying  upwards,  and  down  go  all  other  prices,  while  the 
volume  of  the  currency  goes  on  shrinking.  The  usurer's 
money  will  then  lend  for  more,  his  fixed  credits  will 
be  worth  more.  He  reaps  the  harvest.  So  does  the 
speculator.  It  is  not  necessary  to  remind  the  student 
of  financial  history  of  instances  of  this  sort  of  manipu- 
lation. 

Of  course  the  demonetization  of  silver  made  the  vol- 
ume of  this  unsupported  currency  greater  and  was  in 
that  way  an  advantage  to  the  manipulators   of  money. 

Bimetallism  will  not  cure  the  trouble.  It  is  merely 
a  sop  to  those  who  do  not  implicitly  believe  in  gold  as 
the  divinely  constituted  money  of  the  world.  Whiln 
gold  and  silver  are  used  as  money  they  will  be  superior 
to  all  other  sorts  of  property  both  for  hoarding  and 
lending,  and  for  that  reason  if  for  no  other,  will  always 
in  time  of  pressure  be  collected  and  hoarded  by  those 
who  control  the  surplus  products  of  the  nation  and 
dominate  its  financial  interests.  They  may  always  be 
used  as  instruments  to  oppress  industry. 

A  commodity  set  apart  as  money  has  a  great  advan- 
tage over  all  other  sorts  of  wealth.  It  is  wealth  gener- 
alized, capable  of  being  readily  converted  into  anything 
produced  by  the  industries  of  the  nations  using  that 
money.  It  is  therefore  sought  by  every  one  more  than 
any  special  sort  of  wealth. 

But  even  if  this  were  not  true,  bimetallism  would 
prove  a  will-o'-the-wisp  to  the  financial  reformer.   Past 


A  BREED  OF  BARREN  METAL  165 

experience  seems  to  indicate  the  impracticability  of 
keeping  in  circulation  two  distinct  money  metals,  each 
based  on  its  own  intrinsic  value;  and  making  one  the 
standard  and  allowing  the  other  to  be  redeemed  in  it 
is  childishly  foolish.  A  paper  dollar  redeemed  in  gold 
is  more  serviceable  than  a  silver  dollar  redeemed  in  gold, 
for  the  latter  as  well  as  the  former  becomes  a  mere 
circulating  obligation, and  the  silver  in  it  is  of  no  more 
value  than  a  grain  of  sand.  Of  course  when  it  ceases  to 
be  a  dollar  and  becomes  grains  of  silver  the  value  re- 
turns. 

But  to  return  to  bimetallism  proper  or  the  use  of 
both  gold  and  silver  on  an  exactly  equal  footing.  The 
same  influences  do  not  always  control  the  jirices  of  gold 
and  silver,  and  there  is  no  assurance  that  fixed  weights 
of  each  will  long  remain  of  tlie  same  relative  value. 
Asa  matter  of  fact,  they  are  both  constantly  fluctuating 
in  price.  The  principle,  that  of  two  metals  circulaling 
together  as  money,  that  one  whose  intrinsic  value  is 
less  as  comi)ared  with  its  face  value,  will  drive  out  of 
circulation  that  whose  intrinsic  value  is  greater  as  com- 
pared with  its  face  value,  is  pretty  well  established 
under  the  name  of  Gresham's  law.  The  expense  of 
coinage  has  a  slight  tendenc}^  to  modify  the  law,  as  have 
also  other  considerations,  but  still  its  manifestations 
are  very  marked.  Silver  was  twice  almost  entirely 
driven  horn  circulation  because  of  its  relatively  high 
intrinsic  value,  and  if  silver  was  coined  to-morrow  and 
made  legal-tender  for  any  amount  at  a  ratio  of  sixteen 
to  one,  there  would  not  be  a  gold  piece  in  circulation 
in  six  months.  Under  Gresham's  law,  the  dual  gold 
and  silv<!r  standard  would  produce  fluctuation  of  staiui- 
ard  and  value  as  surely  as  W(3uld  a  gold  or  silver 
standard.  But  one  metal  would  circulate  at  a  time. 
When  tile  diimaud  for  that  metal  for  coiiuige,  or  in  the 
arts,  or  both,  or  wlien  other  causes  advanced  the  price 
of  the  nifUal,  relative  to  its  money  value,  lieyonTI  the 
price  f)f  the  other  mDiiey  metal,  the  valuable  melal 
wouhl  be  melted  down  an.l  sold  as  bullion  and  the 
'•heaj)er  metal  wouhl  come  into  eircuial  ion.  By  the 
time  the  greater  [)orlioii  of  the  eheiiper  metal    had  got- 


1(5(5  A    BREED    OF    BARREN    METAL 

ten  into  the  circulation,  the  greater  portion  of  the  dearer 
metal  would  have  been  driven  out.  The  circulation 
would  still  be  contracted  to  the  volume  of  practically 
but  one  of  the  money  metals.  This  would  entail  a 
heavy  loss  in  coining  and  recoining  and  in  no  way  re- 
lieve contraction  of  the  currency. 

Of  course  where  one  metal  is  subsidiary  to  the  other, 
the  law  has  no  eti'ect. 

It  might  be  possible  to  establish  bimetallism  with  a 
composite  standard,  and  secure  a  volume  of  metallic 
currency  somewhat  adequate  to  the  needs  of  the  nation, 
but  that  would  come  so  near  a  sane  solution  of  a  bi- 
metallic system  that  it  would  be  scouted  by  every 
"statesman"  and  "practical  financier"  in  the  world. 
And  it  would  still  be  a  metallic  currency  incapable  of 
responding  to  the  laws  of  supply  and  demand,  or  of 
maintaining  a  fixed  standard.  A  scientific  money 
cannot  be  based  on  one  or  two  metals  or  other  com- 
modities. 

Fluctuation  of  the  money  volume  or  standard  has 
many  attendant  evils. 

There  is  little  need  to  argue  that  contraction  and  ex- 
pansion of  the  currency,  with  a  consequent  lowering  or 
raising  of  the  standard,  is  undesirable,  but  I  will  point 
out  a  few  of  the  attendant  evils.  Contraction  means 
high-priced  money,  a  gain  to  the  creditor  at  the  expense 
of  the  debtor,  an  increase  of  interest  and  all  unearned 
incomes  at  the  expense  of  the  joroducing  masses,  an 
easily  monopolized  niedium  of  exchange.  It  means  a 
fall  in  prices  with  a  consequent  diminution  of  the  re- 
turns to  active  business  men,  a  curtailing  of  business 
enterprises  and  an  overstocking  of  the  labor  market. 
An  overstocked  labor  market  means  lower  wages.  Give 
a  greater  return  to  the  money-lender,  increase  unearned 
incomes,  and  the  producer  must  get  less.  A  relative  ris- 
ing of  |he  money  standard  produces  a  like  result.  A 
dollar  which  remains  stationary  in  value  while  the 
price  of  each  commodity  which  the  dollar  stands  for 
falls  twenty  per  cent,  gives  to  the  holder  of  tliat  dollar, 
or  to  him  who  collects  a  debt  measured  in  that  dollar, 
the  same  advantage  as  though  the  dollar  had  appreciated 


A  BREED  OF  BAKKEN  METAL  107 

a  like  amount.  The  reason  is,  that  dollars  measure 
relative,  not  absolute  values,  and  all  debts  are  ulti- 
mately paid  in  goods.  The  application  of  improved 
methods  and  machinery  to  production  brings  down  the 
price  of  commodities,  and  unless  we  would  give  all  the 
benefit  of  this  improvement  to  the  money-lender,  we 
must  have  a  responsive  money  standard.  But  the  tend- 
ency of  all  money  standards  so  far  devised,  has  been 
toward  positive  appreciation.  It  is  necessarily  so  with 
any  single  commodity  standard.  And  the  rise  in  wages 
consequent  to  such  appreciation  is  more  than  counter- 
balanced by  the  contraction  of  business  and  the  conse- 
quent overstocking  of  the  "labor  market."  Periods  of 
currency  contraction  have  always  been  times  of  distress 
among  laborers. 

I  am  aware  that  Economist  Walker  has  given  state- 
ments to  prove  that  a  panic  has  always  occurred  at  times 
of  currency  inflation.  But  if  his  statements  are  ex- 
amined it  will  be  found  that  the  panic  really  occurred 
during  a  time  of  contraction  from  a  larger  volume  of 
currency  to  a  smaller.  The  panic  culminated  in  severe 
contraction. 

Inflation  of  the  currency  of  a  country  or  a  lowering 
of  the  standard  of  value  below  the  average  price  of 
commodities,  gives  an  advantage  to  the  delitor  at  the 
expense  of  the  creditor.  It  artificially  enhances  prices, 
gives  an  unearned  profit  to  the  holders  of  goods,  and 
hence  stimulates  speculation.  Stocks  of  metallic  money 
or  money  metals  share  this  appreciation,  to  the  benefit 
of  the  moneyed  class.  Inflation  lowers  the  real  income 
of  persons  of  fixed  salaries,  and  has  a  detrimental  in- 
fluence on  business  morals  and  methods.  On  the  other 
hand,  inflation  increases  the  volume  of  business,  in- 
'Tf^asestlie  demand  for  lab(jr,  and  ])roduces  a  temporary 
prosperity  among  the  ]al)oring  masses.  At  least,  such, 
according  to  Hamsfy,  is  the  lesson  taught  by  the  infla- 
tion of  the  Rev(jlutionary  period,  and  we  yet  hear 
laborers  Hj)eak  of  the  good  times  following  the  inflation 
of  the  civil  war.  Hut  I  am  inclined  to  tliiiik  that  the 
raust!  was  dcfjpi.T,  and  inflation  beyond  business  need  is 
a  dangerous  experiment. 


CHAPTER  XXVI. 

Our  Banking  System — The  bank  as  an  instrument  for  controlling  currency — 
Money  a  close  monopoly — Its  effect^The  importance  of  governmental  con- 
trol of  the  currency — Fraud  or  cunning,  and  force — The  effectiveness  of  the 
bank — The  weaknesses  of  the  banking  system — Its  effect  on  the  community — 
Action  of  banks  in  time  of  panic — Their  withdrawal  of  money  from  trade — A 
sound  currency  system — The  present  banking  system  from  the  standpoint  of 
financiers — No  solution  for  the  currency  question  while  the  banking  system 
is  controlled  by  private  individuals — Banking  ihe  peculiar  province  of  govern- 
ment. 

To  disarm  is  better  than  to  stab. 

As  we  have  seen,  our  currency  is  unstable  as  to  vol- 
ume and  standard,  easily  manipulated  and  controlled, 
and  if  placed  on  a  metallic  basis  will  be  contracted  to 
a  volume  entirely  inadequate  to  do  the  business  of  the 
country.  The  bank  is  a  ready  instrument  for  control- 
ling the  currency.  It  dictates  our  financial  policies, and 
levies  tribute  on  our  commerce.  Every  law  connected 
with  currency  and  banking  has  been  dictated  by  those 
whose  business  it  is  to  exact  interest  for  themselves 
and  others.  The  mechanism  of  all  others  which  affects 
the  whole  people,  from  the  lad  who  collects  and  sells  a 
dozen  of  eggs  to  the  manufacturer  who  disposes  of  a 
steamship,  is  more  closely  monopolized  than  the  tele- 
phone or  the  electric  light.  Although  the  idea  of  money 
is  as  old  as  history,  the'  patent  on  the  machine  has 
never  expired.  It  still  pays  a  royalty  to  private  indi- 
viduals, and  the  power  for  harm  wielded  by  the  manip- 
ulators of  the  financial  machine  is  eloquently  testified 
by  smokeless  chimneys,  silent  wheels  and  starving 
workmen. 

■  The  railway  and  the  telegraph  are  powerful  monop- 
olies, often  used  by  those  who  control  them  for  oppres- 
sion and  extortion,  but  the  banking  monopoly  is  a 
hundred  times  more  dangerous.   It  controls  all  monop- 

168 


A    BREED    OF    BARREN    METAL  1G9 

olies,  presides  at  the  exchange  of  all  commodities,  and 
fixes  the  measure  by  which  all  wealth  shall  be  meted 
out.  You  may  as  well  farm  out  the  police  power  as  the 
banking  privilege.  Indeed,  in  the  present  state  of  the 
world,  cunning  and  trickery  acting  through  powerful 
organizations  are  infinitely  more  oppressive  than  mere 
brute  force.  There  is  little  doubt  but  that  mere  popular 
sentiment  would  be  ample  protection  against  forcible 
wrong,  while  the  people  are  entirely  at  the  mercy  of 
the  cunning  and  unscrupulous.  Popular  sentiment  is 
too  obtuse  to  see  the  wrong  in  its  true  enormity.  It 
is  the  business  of  economists  and  sociologists  to  point 
it  out,  and  of  the  people  through  their  government  to 
abate  it.  "He  who  cojitrols  the  dollar  rules  the  earth, " 
is  literally  true  in  the  nineteenth  century,  and  the  peo- 
ple must  gain  control  over  the  institutions  which  con- 
trol the  dollar,  or  lose  their  hold  on  government.  It 
might  be  well  said,  "Let  me  make  your  currency  laws 
and  let  him  who  will  command  your  armies," 

It  will  not  be  denied  that  as  an  instrument  for  trans- 
ferring and  canceling  obligations,  the  hanking  system 
has  great  eniciency.  If  it  were  open  to  the  wliole  peo- 
ple its  efficiency  would  be  twice  as  great.  It  would  be 
capable  of  being  made  well  nigh  perfect.  But  is  it  now 
a  safe  institution  to  control  the  finances  of  the  people? 
We  have  seen  that  the  currency  system  has  a  very  ques- 
tionable and  crude  foundation.  The  banks  necessarily 
share  its  weakness.  Indeed  they  are  part  of  the  cur- 
rency system. 

But  the  l)anks  have  weaknesses  of  their  own.  The 
banking  ca[)ital  (jf  the  United  States  was,  in  a  recent 
n^port  of  the  Comptroller  of  the  Currency,  estimated 
at  $1. (>'.>!, 703, 950,  the  t(jtal  resources  of  the  banks  at 
.$7,<)ss,r>71,sl7,  the  casli  assets  at  .$515,987,740  and  tlie 
d<;p<)sits,  individual  and  saving,  at  $4,535,908,5.^4.  Thus 
while  the  ultimate*  resources  of  th(;  hanks  are  appar- 
(;nLly  sufficient  to  meet  all  demands,  the  cash  assets  an^ 
at  any  time  sufficient  to  moot  but  a  very  small  percent- 
agfj  of  the  demand  which  nuxy  b(!  made  by  (l('])()sitors 
alone.  The  banks  are  literally  kept  upl)y  the  assump- 
tion that  most  depositfU's    will    not    claim    their    own. 


170  A  BREED  OF  BARREN  METAL 

They  are  absolutely  dependent  on  confidence  and  credit. 
But  in  time  of  panic,  the  consciousness  of  this  veiy 
weakness,  if  not  the  greed  for  gain,  would  oblige  them 
to  hoard  all  of  the  ready  cash  which  they  can  get  their 
hands  on,  and  keep  it  from  the  channels  of  business 
until  the  storm  blows  over.  Depositors  withdraw  from 
the  banks  and  the  banks  in  turn  withdraw  fr,.m  busi- 
ness the  much  needed  money  until  nothing  is  left  to 
carry  on  exchanges.  To  take  money  from  business  in 
time  of  panic  is  like  drawing  blood  from  a  consumptive 
when  he  needs  every  spark  of  energy  to  keep  up  his  vi- 
tality. And  the  banks  are  peculiarly  well  situated  to 
make  the  draft.  That  they  do  so  in  times  of  distress 
goes  without  saying.  During  the  last  panic,  it  is  true, 
the  bulk  of  the  banks  saved  themselves,  but  at  what  a 
terrible  expense  to  all  other  lines  of  business!  As  is 
always  the  case,  when  bank  favors  were  most  wanted 
they  were  not  to  be  had.  If  depositors  had  become  as 
much  frightened  as  the  banks  themselves,  there  would 
not  have  been  an  open  bank  in  the  country  at  the  end 
of  189B.  "In  its  incipiency  it  was  a  bankers'  panic," 
says  a  prominent  railway  president. 

Yet  ours  is  such  an  excellent  "sound"  money  sys- 
tem 1  A  banking  system  so  stable  as  to  arouse  the  ec- 
static admiration  of  statesmen  and  financiers!  The 
stability  is  demonstrated  when  the  "system"  succeeds 
in  bankrupting  the  industries  of  the  sountry  instead  of 
bankrupting  itself. 

It  is  quite  true  that  from  the  standpoint  of  the  finan- 
cier, which  to-day  is  but  another  and  milder  term  for 
Shylock,  the  present  banking  system  is  perfection  itself. 
It  may  issue  as  much  or  as  little  money  as  it  may 
choose,  limited  only  by  the  value  of  the  United  States 
bonds  it  can  control.  It  can  collect  interest  on  the  ba- 
sis of  this  money,  and  also  the  money  itself.  It  can 
create  a  gold  panic  at  will.  It  can  make  money  strin- 
gency by  the  turn  of  its  hand.  If  laws  do  not  suit  it, 
it  can  thrust  its  long  tentacles  into  the  purse  of  the  na- 
tion and  threaten  to  sap  it  dry  unless  laws  are  made  to 
suit.  In  the  inelegant  but  expressive  slangof  the  times, 
the  banking  and  financial  combination  has  the  country 


A  BREED  OF  BARREN  METAL  171 

by  the  leg  and  can  make  its  tackling  effective  whenever 
it  chooses.  Is  that  a  safe  state  of  affairs  for  a  great 
nation? 

There  is  no  solution  of  the  interest  or  currency  ques- 
tion while  the  currency  system  remains  in  private 
hands,  manipulated  for  private  gain.  The  banks  are  a 
most  important  part  of  the  currency  system,  The\^  are 
now  the  great  instruments  of  the  usurer.  To  make  the 
usurer  harmless  these  instruments  must  be  taken  from 
him.  The  only  w^ay  to  make  the  currency  system  serve 
the  whole  people  is  through  the  people's  government. 
We  must  have  a  national  banking  system  in  fact  as 
well  as  in  name.  Constitutional  powers  are  ample  for 
the  accomplishment  of  this  end. 

The  power  to  issue  money  has  always  been  considered 
the  peculiar  prerogative  of  the  people  through  the  state, 
and  there  is  no  generic  difference  in  coining  or  issuing 
money  and  establishing  a  banking  system.  A  bank  is 
an  instrument  of  exchange  as  truly  as  a  <Jollar  is.  Any 
power  which  has  the  control  of  one  must  have  the  con- 
trol of  the  other. 


CHAPTER  XXVII. 

A  Real  National  Banking  System — How  it  may  be  established — A  detailed 
plan — The  essential  principles— Its  effect  on  usury— Further  provisions  against 
interest-taking — A  complete  remedy. 

The  ground  is  cleared;  what  shall  the  structure  be  9 

A  REAL  national  banking  system  must  be  under  the 
direct  control  of  the  government.  All  past  experience 
has  demonstrated  that  where  individuals  were  given  ir- 
responsible power,  they  used  it  to  advance  their  own 
ends,  regardless  of  others.  However  crude  and  imper- 
fect the  control  which  the  people  can  exact  over  an  in- 
stitution, it  makes  that  institution  more  responsive  to 
the  people's  inteo^'ests  than  would  be  any  institution 
wholly  unaccountable  to  the  people.  These  principles 
are  founded  necessarily  on  the  selfish  motives  which 
dominate  the  business  world.  Give  men  a  privilege  and 
they  soon  claim  it  as  a  right.  The  elected  chief  be- 
comes in  the  next  generation  the  hereditary  dictator, 
and  in  the  third,  the  king  by  the  grace  of  God,  the 
absolute  dispenser  of  the  happiness  of  his  "subjects." 
Just  so  with  the  financial  ruler.  He  secures  the  fran- 
chise by  any  means,  then  he  owns  it  as  a  vested  right, 
then  he  alone  has  a  right  to  say  how  it  is  administered. 

The  problem  is  to  institute  a  banking  system  con- 
trolled through  the  government  of  the  people.  It  is 
very  simple.  No  bonds  need  be  issued,  nor  debts  con- 
tracted beyond  the  rental  of  offices  and  the  salaries  of 
clerks, and  it  is  to  be  hoped  that  the  former  item  would 
not  long  remain  formidable.  It  is  not  necessary  to  do 
a  banking  business  for  the  people,  but  the  banking 
business  of  the  people.  The  gross  product  of  wealth  for 
each  year,  while  in  the  process  of  exchange,  will  serve 
as  ample  capital.* 

*  It  must  be  borne  in  mind  that  all  goods  offered  for  sale  must  be  weighed, 
measured  and  stored  at  present,  and  I  propose  no  additional  trouble. 

172 


A  BREED  OF  BARREN  METAL  178 

1.  Let  banking  houses  be  established  by  the  govern- 
ment in  every  city,  village  and  hamlet  where  there  is  a 
market  for  produce  sufficient  to  warrant  such  an  insti- 
tution. 

2.  When  any  commodity  for  which  there  is  a  market, 
is  ready  to  sell,  let  the  owner,  if  he  so  desires,  place 
such  commodity  in  a  warehouse,  private,  corporate  or 
public,  bonded  and  registered  for  the  purpose,  and  re- 
ceive therefor  warehouse  receipts. 

3.  The  receipts  should  be  issued  by  weighers,  gaug- 
ers  or  inspectors,  elected  by  the  electors  of  the  county, 
state  or  municipality  in  which  the}'  serve,  but  direcily 
responsible  to  the  head  of  the  United  States  banks. 
The  warehouse-owner  or  his  agent,  where  the  ware- 
house is  private  or  quasi-public,  may  countersign  the 
receipts.  If  the  warehouse  be  public  this  should  be  done 
by  the  officer  in  charge. 

4.  On  the  presentation  at  the  government  bank  of 
these  receipts,  and  the  giving  of  additional  security  to 
the  extent  of  the  market  value  of  the  goods  therein  rep- 
resented, let  the  bank  take  up  the  receipts  and  give  the 
presenter  credit  on  the  books  of  the  bank  for  the  market 
price  of  the  goods  stored,  or  issue  him  full  legal-tender 
paper  money  for  that  amount. 

5.  In  the  bond  of  security  required  of  the  person 
thus  opening  a  bank  account,  let  it  be  required  that  he 
sell  the  goods  or  redeem  the  warehouse  receipts  for  cash 
within  eighteen  months  from  the  original  storing  of  the 
goods,  under  penalty  of  forfeiting  his  goods  and  bond 
or  sufficient  thereof  to  indemnify  the  bank  for  the  credit 
advanced.  The  bank  should  be  required  to  turn  over 
the  warehouse  receipts  to  the  owner  or  his  assignee  on 
tender  of  the  amount  of  legal  tender,  or  cancellation  of 
the  credit  issued  thereon. 

6.  Let  the  warehouses  bo  open  to  all  classes  of  goods  as 
at  present,  with  the  requirement  that  they  be  for  sale 
in  good  faith,  and  let  the  banks  issue  credit  or])apcr  (ni 
goods  for  sale  alone. 

7.  L<^t  bonds, stocks  and  evidences  of  credit  I)e  taken 
as  collateral  on  the  security  Ijond,  but  let  no  money  be 
issued  on  anything  execjpt  rt'ul  tangible  wealth  at  its 
market  price  at  the  place  where  the  hank   \^  h^cated. 


174  A  BREED  OF  BARREN  METAL 

8.  Let  arrangements  be  made  by  which  goods  in 
transit  may  become  the  basis  of  bank  credit  or  cur- 
rency. 

9.  Let  all  branches  of  legitimate  banking  be  con- 
ducted by  the  government  at  cost,  and  the  revenue  be 
raised  by  charging  a  small  commission  on  transactions. 

10.  Let  actual  currency  deposits  be  also  made  the 
l)asis  of  bank  credit. 

11.  Let  the  banking  department  have  full  charge  of 
the  issue  of  all  money.  Let  the  coinage  of  all  metallic 
money  cease  and  let  gold  and  silver  cease  to  be  legal- 
^nder  for  debts. 

12.  Let  the  precious  metals,  so-called,  be  placed  on 
exactly  the  same  footing  as  other  goods  and  allowed  to 
serve  as  a  basis  for  the  issue  of  legal-tender  paper. 

13.  Repeal  all  of  the  present  laws  relating  to  bank- 
ing and  currency,  except  such  as  may  be  applied  to  the 
new  system,  prohibit  private  individuals  from  entering 
the  banking  business,  and  establish  the  proposed  system 
by  appropriate  legislation  as  to  details. 

This  is  a  plan  for  a  scientific  currency  and  banking 
system.  I  do  not  insist  on  details,  but  I  do  insist  on 
the  underlying  principles:  that  all  money  shall  be  is- 
sued on  wealth  in  the  process  of  exchange,  that  the 
actual  circulating  medium  or  money  taken  shall  have 
no  intrinsic  value,  or  as  small  an  intrinsic  value  as  may 
be,  and  that  the  entire  currency  and  banking  system 
shall  be  under  the  direct  control  of  the  government. 
The  end  and  aim  of  currency  is  to  facilitate  exchanges. 

Such  a  currency  and  banking  system  would  strike  at 
the  very  foundation  of  usury,  and  would  cut  borrowing 
down  to  a  very  small  volume  indeed. 

This  would  entirely  relieve  the  necessity  of  borrowing 
in  commercial  transactions.  The  discounts  on  bills  of 
credit  would  be  immaterial.  There  could  be  no  cor- 
nering of  the  currency  and  no  paucity  of  medium  of  ex- 
change. 

But  if  money  could  be  hoarded  there  would  still  be  a 
temptation  to  hoard  it,  and  to  make  the  remedy  against 
usury  perfect,  the  currency  must  be  made  of  an  especial 
sort. 


A   BREED    OF   BARREN    METAL  17-) 

1.  Present  interest  la^vs  should  be  repealed  and  in- 
terest-taking made  punishable  as  a  crime.  The  punish- 
ment should  not  be  made  unnecessarily  severe,  nothing 
more  than  the  forfeiture  of  the  entire  debt,  one-half  to 
go  to  the  informer, 

2.  Loans  between  private  parties  should  be  made 
absolutely  uncollectible  except  where  made  through 
government  banks,  and  it  should  be  made  the  duty  of 
the  bank  officer  to  see  that  the  whole  amount  of  money 
for  which  security  was  given  should  be  paid  over  to  the 
borrower.  Soliciting  back  any  portion  should  be  con- 
sidered and  punished  as  fraud  or  getting  money  under 
false  pretenses. 

3.  Issue  money  stamped  conspicuously  quite  across 
the  face  with  the  date  of  expiration,  year  and  month, 
issue  twice  a  year  and  date  on  any  two  months  of  the 
year,  six  months  apart,  and  make  such  money  current 
but  eighteen  months  from  the  date  of  issue. 

4.  After  an  issue  had  become  non-current,  allow  it 
to  be  redeemed  at  par  at  the  bank  for  a  few  days,  with 
the  requirement  that  all  money  presented  for  redemp- 
tion should  be  left  in  the  bank  until  the  entire  period 
for  the  redemption  of  the  issue  had  expired.  The  re- 
demption would  be  made  in  current  notes  running 
eighteen  months  longer. 

5.  Where  current  notes  of  the  face  value  of  a  cer- 
tain sum,  say  two  hundred  dollars,  were  presented  for 
redemption  by  any  one  person,  let  him  be  charged  a 
percentage  for  the  redemption  on  the  amount  of  the 
notes  presented  in  excess  of  his  average  deposit  or  credit 
at  the  bank  during  the  time  for  which  the  notes  were 
current.  Charge  all  depositors  a  percentage  on  their 
cash  deposits  in  excess  of  the  credit  issued  to  them  on 
goods. 

(').  After  the  few  days  were  past  during  which  the 
currency  should  l)e  redeemed  at  the  bank  at  par,  let 
a  uniform  percentage  equal  to  the  average  deterioration 
of  wealth  be  charged  for  redemption,  until  the  non- 
current  notes  should  become  worthless.* 

*VVhile  I  recomincnd  most  emphatically  that  the  banking  system  be  owned 
by  the  Rovernmenl.  tfie  proposed  plan  may  readily  be  applied  to  the  presittu 
hankinK  system. 


176  A  BREED  OF  BARREN  METAL 

This  woiild  make  it  no  more  desirable  to  hoard  money 
than  to  hoard  goods,  and  would  force  those  who  re- 
ceived surplus  incomes  to  invest  them  in  real  wealth  or 
to  loan  them  without  interest,  for  use  in  production. 


CHAPTER  XXVIII. 

The  System— Its  practical  working— Regulation  of  the  money  volume— Supply 
and  demand— A  convertible  currency  ideal — Gold  and  silver — A  paper  cur- 
rency—Coin certificates— The  money  unit— What  fixes  its  value— Volume  and 
the  unit — Price  of  the  metal  and  the  money  unit— Gold  a  constantly  appreciat- 
ing money  unit — A  mixed  currency— The  value  of  the  commodity  money  unit 
depends  on  the  market  price  of  the  material  of  which  the  money  is  composed- 
Auxiliary  currency — Silver— Intrinsic  value  not  necessarily  an  attribute  of 
money — The  proposed  money  a  paper  money — The  weakness  and  strength  of 
paper  currency — Historical  instances— Paper  money  always  resorted  to  in  des- 
perate national  crises— Metallic  money  always  fails  in  time  of  national  need  — 
The  bankers' proposition -The  proposed  currency  and  supply  and  dennnd- 
Incapable  of  fluctuation. 

In  the  light  of  what  is,  toe  maij  discover  irhdf  ■•should  hf. 

The  practical  working  of  tlie  system  would  he  vprv 
simple.  We  will  suppose,  for  illustration,  that  a  liank 
is  established  in  a  small  town  surrounded  by  an  agri- 
cultural population  and  carrying  on  witliin  its  borders 
some  manufacturing  business.  The  town,  of  course,  is 
supplied  with  stores,  so  that  nearly  all  functions  of  thi' 
commercial  Inmk  will  be  brouglit  into  reciuisition 

To  begin  with  the  simplest,  we  will  suppose  that  tin- 
farmer  wants  to  market  his  crop.  He  may  go  into  tlx' 
city  and  sell  it  as  he  does  now  to  the  local  dealer,  and 
then  it  would  be  the  local  dealer  who  would  do  busi- 
ness with  the  bank.  He  may  want  to  bold  a  portion  of 
the  crop  for  a  few  days  and  borrow  on  it.  He  may  want 
to  take  his  time  at  selling  it.  In  that  case  he  will  take 
a  load  or  several  loads  into  town  and,  as  farmers  do  at 
present,  store  it  in  one  of  the  grain  warehouses,  taking 
warehouse  receipts  therefor.  He  will  then  file  a  bond 
with  the  bank  and  present  these  warehouse  receipts  or 
a  portion  <jf  t  hom  and  receive  bank  credit  or  money 
therefor.  With  this  money  he  will  go  to  the  mendiant 
and  purchase  a  portion  of  his  year's  supplies.  Tim 
merchant  will  take  the  money  t.o  the  miller  and  lay  in 
a  stock  of  flour  for  his  town  customers,  the  miller  will 

177 


178  A  BREED  OF  BARREN  METAL 

go  to  thy  farmer  and  purchase  his  wheat  to  keep  up  his 
stock  of  Hour  and  the  farmer  will  use  the  money  to  re- 
deem the  warehouse  receipts  and  release  his  wheat. 
The  money  which  the  farmer  has  issued  on  his  wheat 
might  serve  as  the  medium  of  a  dozen  transactions. 
The  farmer  might  use  it  to  pay  the  blacksmith,  who 
might  use  it  to  pay  his  helper,  who  might  pay  it  to  the 
doctor,  who  might  pay  it  to  a  music  teacher  or  artist, 
who  might  pay  it  to  a  merchant,  who  might  pay  it  to 
a  manufacturer  of  shoes,  who  might  pay  it  to  a  lumber 
man,  etc.,  until  that  or  other  money  would  be  paid 
again  to  the  bank  to  redeem  the  warehouse  receipts,  in 
pledge  and  release  the  wheat  from  the  warehouse. 

.Just  in  the  same  way  the  manufacturer  of  furniture, 
•let  us  say,  might  store  his  goods,  obtain  receipts,  and 
presenting  them  with  his  bond  at  the  bank,  obtain 
money  with  which  he  might  buy  raw  material,  pay 
wages  to  workmen,  etc.,  etc.,  until  such  time  as  he 
might  sell  his  goods,  when  he  would  use  the  money  re- 
alized from  the  sale,  or  a  portion  of  it,  to  redeem  the 
warehouse  receipts  and  turn  over  the  furniture  to  the 
purchaser. 

The  miller  might  store  his  flour  and  get  money  on  it 
to  buy  wheat,  pay  for  his  barrels  and  his  hands  and 
keep  his  mill  going.  The  necessity  for  redeeming  his 
pledges  would,  of  course,  make  it  incumbent  on  him, 
as  well  as  all  the  rest,  to  sell  his  goods  as  rapidly  and 
as  advantageously  as  possible,  but  while  he  had  an 
equivalent  in  value  he  would  have  no  trouble  in  pur- 
chasing what  he  wanted  or  of  using  it  as  live  capital  to 
carry  on  his  business. 

The  merchant  might  store  his  surplus  stock,  draw  it 
from  the  warehouse  in  consignments,  and  use  the  money 
issued  upon  it  to  meet  current  expenses  and  keep  up 
stock.  The  miner  might  store  his  product  and  have 
money  issued  upon  it  to  keep  up  his  business  while  he 
negotiated  its  sale.  In  any  branch  of  business  there 
would  be  no  such  thing  as  a  scarcity  of  money.  •  As 
soon  as  goods  were  produced  and  placed  in  the  common 
stock  their  representative  currency  would  be  placed  in 
circulation    Each  dollar's  worth  added  to  ^^ui^ply  would 


A  BREED  OF  BARREN  METAL  ITU 

be  a  dollar  added  to  effective  demand  for  goods  of  some 
sort.  Commerce  could  never  become  stagnant  for  want 
of  a  medium  of  exchange.  This  town  would  be  a  typ- 
ical town. 

There  could  never  be  too  much  money,  for  every  dol- 
lar added  to  the  curr<Micy  would  presuppose  a  dollar's 
worth  of  wwalth  placed  publicly  on  sale.  According  U) 
the  unswerving  law  of  economics  there  is  a  supply  for 
every  demand,  and  the  dollar  founded  on  demand  would 
find  its  supply. 

In  the  natural  course  of  business  the  money  would 
be  first  issued  to  the  original  producer.  He  would  pay 
it  to  those  who  would  place  it  in  the  hands  of  the  re- 
tailer. The  retailer  must  turn  it  over  to  the  wholesaler 
and  the  wholesaler  pay  it  back  to  the  original  producer 
to  go  back  to  the  bank  (jf  issue. 

There  never  yet  was  a  proposition  put  forward  which 
did  not  meet  with  objections,  and  this  is  no  exception. 
Let  us  look  over  a  few  of  the  more  prominent. 

There  is  not  an  intelligent  financier  living  who  will 
not  admit  that  a  currency  founded  on  value  to  the  full 
extent  of  the  issue,  and  perfectly  and  quickly  converti- 
ble, is  an  ideal  currency.  The  proposed  currency  has 
both  of  these  qualities.  It  may  be  said  that  the  pro- 
posed currency  is  not  convertible  into  gold.  I  answer 
that  the  whole  stock  of  gt)ld  in  the  country  is  at  your 
disposal  if  you  have  the  wherewithal  to  purchase  it.  Is 
more  to  be  had  at  present?  And  upon  what  is  based 
the  superstition  that  gold  is  the  only  sort  of  wealth 
which  will  cancel  a  debt?  Simply  on  the  traditional 
worship  of  the  golden  calf.  Gold  will  cease  to  be  legal 
tender  as  soon  as  it  loses  that  quality  by  law.  As  soon 
as  people  become  enlightened  enough  to  realize  that  a 
ilollar's  worth  of  iron  is  really  as  valuable  as  a  dollar's 
worth  of  gold,  they  will  see  without  difiiculty  that  a 
note  redeemed  in  any  sort  of  wealth  which  the  owner 
may  choose,  including  g(jld,  is  as  truly  a  redeenuiblc 
note  as  a  note  redeemable  in  gold  alone. 

If  under  the  propos<id  currency  ycni  want  to  ship  gold 
to  other  lands  in  exchange  for  goods,  it  will  l)o  much 
easier  than  now  lo  (jbtain  it,  it  will  be  more  [)lentiful 
and  cheap,  for  the  great  demand  for  it  as  a  money  metal 


"180  A   BREED    OF    BARREN    METAL 

will  huve  passed  away.  As  was  said  above,  there  are 
all  other  sorts  of  wealth  into  which  one  may  convert 
his  currency,  and  currency  converted  into  gold  or  any 
other  form  of  wealth  you  may  choose,  is  certainly  more 
truly  convertible  than  currency  convertible  into  gold 
alone.  If  quick  and  certain  convertibility  is  a  quality 
of  good  currency,  then  the  proposed  currency  is  supe- 
rior to  any  currency  yet  known.  The  fixed  security,  as 
well  as  the  deposit  of  wealth  on  which  the  money  is 
founded,  makes  the  convertibility  absolutel}^  certain. 
A  dollar  is  redeemed  every  time  it  is  accepted  for  goods. 
Paper  money  absolutely  secured  is  an  ideal  currency. 
Thus  economists  agree  that  certificates  issued  on  coin 
are  superior  to  any  other  form  of  currency,  for  they  are 
quickly  redeemable,  perfectly  secure,  more  easily  han- 
dled and  in  every  way  better  adapted  to  the  processes  of 
exchange,  than  is  the  coin  on  which  they  are  founded. 
Wealth  certificates  are  necessarily  superior  to  coin  cer- 
tificates. They  have  all  the  convenience  and  double  the 
security  of  the  former  and  are  issued  on  such  a  princi- 
ple as  to  make  them  available  for  any  one  who  wishes 
to  exchange  wealth.  In  fact  they  have  greater  conveni- 
ence than  have  any  coin  certificates, for  a  coin  certificate 
without  the  legal-tender  quality  would  be  good  for  the 
coin  only,  while  the  proposed  wealth  certiticate  would 
be  good  for  any  sort  of  wealth  in  the  market.  If  the 
coin  certificates  are  made  legal-tender,  then  they  are 
simply  limited  wealth  certificates  used  as  money,  and 
the  coin  becomes  simply  stored  wealth,  differing  in  no 
way  from  the  wealth  proposed  as  a  basis  of  currency. 

Up  to  a  volume  equal  to  the  amount  of  wealth  at  any 
time  offered  for  sale,  the  proposed  currency  would  be 
perfectly  stable  in  unit  of  value.  It  is  commodity 
money,  or  money  founded  on  commodities  small  in 
value  as  compared  with  the  wealth  represented,  whose 
unit  value  is  affected  by  change  of  volume.  Above  the 
volume  of  wealth  offered  for  sale,  this  currency  volume 
could  not  go. 

Economists  have  long  given  unsatisfactory  explana- 
tions of  the  considerations  on  which  depend  the  value 
of  the  money  unit,  and  a  few  recent   writers   in   trying 


A  BREED  OF  BARREN  METAL  181 

to  make  it  clear,  seem  to  have  involved  the  matter  more 
than  ever. 

The  considerations  governing  the  value  of  the  mone}'' 
unit  depend,  to  some  extent,  on  the  sort  of  mone}'- which 
is  under  consideration.  If  the  money  be  credit  money, 
the  value  of  the  unit  depends  on  the  volume  issued, 
above  or  below  the  normal  amount.  Thus,  if  we  con- 
ceive the  stock  of  wealth  to  be  twenty  sheep  and  con- 
ceive these  sheep  to  be  represented  by  one  hundred 
dollars,  each  dollar  will  represent  one-fifth  of  a  sheep. 
Now  let  the  currency  be  swelled  in  volume  so  that  the 
sheep  are  represented  by  two  hundred  dollars  and  each 
dollar  will  represent  but  one-tenth  of  the  value  of  a 
sheej).  Let  the  currenc}''  be  contracted  to  fifty  dollars 
and  each  dollar  will  represent  the  value  of  two-fifths 
of  a  sheep.  Here  we  presuppose  that  the  credit  back 
of  the  currency  is  good  and  that  the  money  token  has 
no  intrinsic  value.  In  a  state  like  that  the  salable 
wealth  in  the  country  would  be  represented  by  the  dol- 
lars in  the  currency  of  the  country  and  the  value  of  the 
dollar  would  be  inversely  proportional  to  the  volume 
in  circulation.  Up  to  the  limit  of  the  credit  the  cur- 
rency unit  could  in  no  way  be  affected  by  the  relation 
of  the  credit  to  the  volume.  Every  dollar  of  the  cur- 
rency would  be  a  demand  for  the  part  of  the  salable 
wealth  represented  by  a  fraction  with  one  as  a  numer- 
ator and  the  number  representing  the  volume  of  the 
currency  as  the  denominator.  It  will  be  readily  seen 
that  any  increase  in  the  denominator  will  decrease  the 
value  of  the  fraction  or  the  money  unit,  and  any  de- 
crease in  the  denominator  or  contraction  of  volume  of 
currency  must  increase  the  value  of  the  fraction  or  the 
value  of  the  money  unit.*  What  is  the  actual  volume 
of  money,  is  not  of  such  importance,  provided  the  mone^^ 
be  allowed  to  circulate  freely  and  the  volume  remains 

*It  is  true  tliat  with  a  mixed  or  heteroi^eneous  currency  like  that  in  use  at 
present,  referred  to  a  sin^^le  commodity  as  a  measure  of  value,  tlie  value  of  that 
coniiriodity, other  thinfjs  being  equal, determines  the  prices  of  otlicr  commodities. 
Hut  the  value  of  the  money  commodity  is  determined  largely  by  supply  and  de- 
mand, and  anythini{  which  tends  to  diminish  the  demand  for  the  money  com- 
(tiodity  tends  to  lower  its  (exchanRe)  value.  It  is  obvious  that  in  the  proportion 
which  other  sorts  of  money  are  used  the  demand  for  the  standard  commodity  as 
a  money  commodity  is  lessened,  and  and  its  value  decreased.  Then,  here  too, 
the  law  of  inverse  proportioa  between  volume  and  unit  value  tends  to  hold  good. 


182  A  BREED  OF  BARREN  METAL 

constant.  If  we  did  a  strictly  cash  business  it  would 
not  make  much  dilt'erence  if  horses  sold  for  ten  dollars 
each  and  wheat  for  twenty  cents  per  bushel,  provided 
everything  else  sold  accordingly  cheap  and  these  prices 
did  not  fluctuate. 

With  a  commodity  money,  or  a  money  token  of 
intrinsic,  equal  to  its  face  value, the  volume  of  the  cur- 
rency has  but  a  secondary  consideration  in  determin- 
ing the  value  of  the  moiiey  unit.  The  value  of  the 
money  unit  depends  on  the  price  of  the  commodity  of 
which  the  money  is  made,  provided  always  that  there 
is  free  coinage  or  manufacture  into  money  in  unlimited 
quantities  of  the  commodity  used  as  money.  Thus,  if 
the  gold  dollar  becomes  more  valuable  than  the  gold 
in  the  dollar,  the  holders  of  gold  bullion  will  have  it 
converted  into  dollars  until  the  increased  volume  of 
the  dollars  will  bring  their  face  value  down  to  their  in- 
trinsic value.  Conversely,  if  the  weight  of  gold  in  the 
dollar  would  sell  for  more  as  bullion  than  it  would  buy 
as  a  dollar,  the  gold  coins  would  be  melted  down  or  the 
gold  bullion  held  from  coining  until  the  scarcity  of 
coin  or  metal  to  coin  would  bring  the  face  value  up  to 
the  intrinsic  value  of  the  dollar.  If  this  were  not  so, 
where  gold  alone  is  money  we  should  find  a  discrepancy 
between  the  face  and  the  intrinsic  value  of  the  coin, 
which  is  contrary  to  experience. 

The  value, then, of  the  gold  money  unit,  or  any  other 
commodity  money  unit,  must  "depend  on  the  price  of 
the  metal  or  the  commodity,  independent  of  its  money 
value.  This  price  depends  almost  entirely  on  the  sup- 
ply and  the  demand  of  the  metal.  Not  the  demand  for 
coining  alone,  but  the  demand  for  coining  and  all 
other  purposes. 

Volume  of  circulation  plays  a  secondary  part.  Where 
there  is  an  increase  in  the  volume  of  circulation,  the 
supply  of  gold  remaining  constant,  the  demand  for 
gold  to  coin  must  increase  the  price  of  the  metal  and 
therefore  appreciate  the  money  unit.  A  demand  for 
gold  in  the  arts  would  have  the  same  effect.  Now  if 
gold  were  the  only  money  in  circulation  and  the  wealth 
of  the  country  remained  constant,  the  increase  in    the 


A  BREED  OF  BARREN  METAL  188 

volume  of  the  currency,  which  would  increase  the  de- 
mand for  and  therefore  the  price  of  gold,  would  in  a 
measure  have  a  compensating  effect  by  decreasing  the 
purchasing  power  of  the  dollar.  But  this  effect  must 
be  rather  theoretical  than  practical,  for  as  a  matter  of 
fact,  no  gold  could  actually  be  drawn  from  the  arts 
while  it  was  more  valuable  for  use  there  than  as  a  money 
metal,  and  the  currency  volume  could  not  be  increased 
with  a  falling  money  unit,  except  where  the  supply  of 
gold  for  all  purposes  outran  the  demand  so  as  to  make 
its  price  fall  everywhere. 

Then  again,  the  wealth  of  the  country  is  not  constant, 
but  increases  so  rapidly,  as  we  have  seen,  that  the 
amount  of  gold  which  may  be  used  for  coinage  cannot 
possibly  keep  the  volume  of  money  proportionally  as 
large  as  at  present.  On  a  gold  basis  the  relative  volunip 
must  ever  decrease  and  the  unit  appreciate. 

Then  our  mixed  currency,  some  founded  on  one  prin- 
ciple and  some  on  another,  prevents  any  uniform  man- 
ifestations of  monetary  economic  law. 

We  see, then,  that  the  value  of  the  money  unit  depends, 
in  a  commodity  or  metallic  currency,  on  the  market 
value  of  the  metal  of  which  the  money  is  composed; 
that  the  laws  of  supply  and  demand  keep  the  money 
value  and  the  market  value  of  the  metal  equal,  or  nearly 
so, and  that  the  volume  of  money  has  liut  a  secondary 
effect  on  the  value  of  the  unit.* 

The  larger  the  volume  of  other  currency  founded  on 
the  standard  money  metal  and  re<leemal)le  therein,  the 
more  fluctuating  the  demand  for  the  standard  money 
metal  and  the  more  variable  the  money  unit.  Auxiliary 
currency  is  really  but  a  tool  fc^r  manipulating  the  stand- 
ard currency,  and  if  th.e  shock  of  contraction  could  be 

•Strictly  speaking,  no  money  while  it  is  being  used  as  money,  has  intrinsic 
value.  When  being  used  in  exchange  it  is  a  representative  of  wealth  to  its  face 
value.  A  gold  dollar  cannot  in  the  same  transaction  have  a  representative  value 
of  a  dollar  and  also  an  intrinsic  valtieof  a  dollar,  for  if  it  had  we  could  get  two 
dollars  in  wealth  for  every  dollar  in  gold.  Hut  that  is  contrary  to  experience.  We 
can  trade  the  metal  in  the  dollar  for  a  dollar's  worth  of  goods  (that  is  barter),  or 
the  dollar  itself  for  a  dollar  s  worth  of  goods,  but  we  cannot  buy  wealth  for  both 
the  dollar  and  the  ineial  in  the  dollar.  When  used  as  a  dollar  the  gold  in  the 
gold  dollar  is  not  worth  ;i  rap.  Intrinsic  value  is  entirely  sequestered  and 
becomes  available  only  wlien  the  dollar  becomes  a  commodity.  That  is  ones 
reason  why  a  metallic  currency  is  so  extravagant.  The  metal  in  the  money  lose 
all  intrinsic  value  while  it  is  used  as  noney,  rfnd  lliiil  .nmcunt  of  wcilth  is 
practically  subtracted  from  the  nation's  assets. 


184  A  BREED  OF  BARREN  METAL 

once  gotten  over,  the  country  would  be  better  of¥  in  all 
respects  with  but  the  standnrd  currency,  without  the 
mongrel  auxiliaries,  useful  only  in  manipulating  the 
currency. 

It  may  be  said  that  the  silver  coins  in  present  use  do 
not  accord  with  the  laws  enunciated  above.  Their 
money  value  is  greater  than  their  intrinsic  value;  their 
money  value  and  the  price  of  the  metal  have  nothing 
to  do  with  each  other.  It  must  be  borne  in  mind  that 
silver  is  not, and  has  not  for  the  last  twenty  years,  been 
a  money  metal  in  the  strict  sense  of  the  word.  The 
coinage  of  silver  was  not  free  but  arbitrary,  and  there- 
fore the  face  value  of  silver  coins  was  allowed  to  ap- 
preciate above  the  bullion  value  without  its  being 
possible  to  offer  enough  for  coinage  to  raise  the  price 
of  the  white  metal  to  a  like  standard.  As  a  matter  of 
fact,  silver  money  as  at  present  used  is  mere  credit 
money,  differing  in  no  essential  manner  from  paper 
money.  Its  standard  is  gold,  and  the  fixing  of  the  price 
of  gold  fixes  the  value  of  the  silver  as  well  as  the  paper 
dollar. 

Whether  a  money  must  have  intrinsic  value,  depends 
on  one's  definition  of  money.  A  recent  writer  labors 
to  show  that  all  money  must  have  intrinsic  value  and 
goes  on  until  he  finally  makes  money  synonymous  with 
wealth.  Carry  his  system  to  its  logical  conclusion,  and 
all  wealth  would  become  money.  This  is  absurd  and 
leads  only  to  a  confusion  of  terms.  Scientific  money  is 
a  mere  medium  of  exchange,  a  mere  token  of  title,  and 
cannot  be  identical  with  the  wealth  exchanged.  It  is 
in  this  sense,  at  least,  which  I  Avish  to  use  the  term  in 
the  following  pages.  I  wish  to  make  as  sharp  a  distinc- 
tion between  the  currency  and  the  wealth  which  the 
currency  is  founded  upon  as  I  would  between  a  title 
deed  and  the  land,  the  ownership  of  which  was  indicated 
by  the  title  deed.  The  one  is  the  instrument  of  trans- 
fer and  the  other  the  thing  transferred.  There  is  no 
advantage  in  jumbling  them  together  and  calling  them 
both  by  the  same  name.  It  is  positively  erroneous. 
Money  is  at  least  but  a  generalized  claim  for  wealth  to 
the  amount  of  the   current   value  represented    by   the 


A  BREED  OF  BARREN  METAL  185 

former.  You  cannot  generalize  any  particular  sort  of 
^yealth  as  such.  By  money  I  mean  the  money  token, 
nothing  more.  Currency  I  use  in  a  broader  sense  as 
any  contrivance  used  in  exchange,  including  banking 
systems.  The  token  need  not  have  value,  but  must  rep- 
resent value. 

It  may  be  said  that  the  proposed  money  is  paper 
money  and  therefore  not  desirable.  If  you  mean  paper 
credit  money  or  fiat  money,  in  the  sense  in  which  it 
has  been  heretofore  known,  then  the  statement  is  incor- 
rect, but  we  have  had  no  experience  which  would  war- 
rant us  in  condemning  even  this.  There  has  never  been 
a  pure  paper  or  credit  currency  in  any  nation.  All  sys- 
tems of  paper  currency  so  far  established  have  been 
exploited  side  by  side  with  gold  and  silver.  It  has 
always  been  the  established  policy  of  the  most  infiuen- 
tial  financiers  to  do  all  in  their  power  to  discredit  and 
depreciate  the  paper  currency  and  finally  turn  to  specie. 
The  paper  money  in  our  currency  system  has  been 
little  else,  in  times  of  peace,  than  a  tool  with  which 
to  manipulate  the  standard  metallic  currency. 

Adam  Smith,  who  is  considered  an  authority  on  such 
matters,  did  not  distrust  paper  money  because  it  was 
paper.     He  writes: 

"A  paper  money  consisting  in  bank-notes,  issued  by 
people  of  undoubted  credit,  payable  upon  demand  with-  • 
out  any  condition,  and,  in  fact,  always  readily  paid  as 
soon  as  presented,  is,  in  every  respect,  equal  in  value 
to  gold  and  silver  money;  since  the  gold  and  silver 
money  can  at  any  time  be  had  for  it.  Whatever  is 
either  bought  or  sold  for  such  paper,  must  necessarily 
be  bought  or  sold  as  cheap  as  it  could  have  been  for 
gold  and  silver." 

While  tl]<i  gold  and  silver  money  could  not  be  had 
for  the  pr(jposed  currency,  gold  and  silver  or  any  other 
sort  of  wealth  may  be  had  for  it,  and  it  would  therefore 
be  better  than  the  best  of  bank  notes. 

Let  us  briefly  review  the  historical  instances  in  wiiich 
paper  money  is  said  to  have  proved  a  failure  and  see 
wiitithor  this  pa|);jr  money  iiad  much  in  common  with 
the  proposed  currency.     Continental    money   is  one  of 


186  A  BREED  OF  BARREN  METAL 

the  Hrst  object  lessons  which  the  advocate  of  metallic 
money  will  point  out  for  the  benefit  of  his  paper  cur- 
rency brethren.  The  Continental  currency  was  issued 
by  a  nation  without  autonomy,  without  credit,  without 
taxing  power;  a  nation  whose  very  existence  depended 
on  the  desperate  chance  of  a  few  scattered  colonists  de- 
feating in  war  the  greatest  power  of  Europe.  It  was 
issued  as  a  credit  money;  no  means  were  provided  for 
its  redemption ;  yet  it  floated  at  par  to  a  considerable 
volume.  While  the  fortunes  of  the  war  and  the  pros- 
pects of  a  nation  were  even  fair  the  money  circulated, 
and  was  finally  made  worthless  only  by  over-issue,  coun- 
terfeiting and  threatened  repudiation.  We  can  then 
gather  from  this  instance  nothing  as  to  the  stability  of 
a  money  founded  on  good  credit,  nor  a  paper  currency 
founded  on  wealth  to  double  its  face  value.  The  issue 
of  paper  money  at  the  time  of  the  Revolution  was 
simply  a  means  of  obtaining  a  loan  or  rather  a  contri- 
bution, and  can  in  no  way  be  compared  with  the  issue 
of  money  for  the  ordinary  needs  of  business. 

The  issue  of  greenbacks  at  the  time  of  the  civil  war, 
as  well  as  the  issue  of  other  circulating  paper  was  made 
simply  on  the  general  credit  of  the  nation,  at  that  time 
menaced  by  the  most  formidable  rebellion  of  history. 
That  it  depreciated  is  not  surprising.  That  it  circu- 
lated at  all  is  far  more  so.  Then  in  the  issue  of  paper 
money  in  war  time  there  was  no  criterion  as  to  what 
amount  was  necessary  to  carry  on  the  business  of  the 
nation.  The  channels  of  trade  were  relatively  over- 
loaded. The  paper  money  itself  was  discriminated 
against  by  laAv,  in  not  being  made  receivable  for  all 
debts,  and  it  was  exploited  by  the  side  of  metallic 
money  Avhich  was  cornered  by  financiers  and  used  as 
an  instrument  to  depreciate  the  paper  currency  for  the 
purpose  of  speculation.  From  the  facts  surrounding 
the  civil-war  issue  of  paper  money  we  are  warranted  in 
concluding  that  the  money  was  as  good  as  the  credit  of 
the  issuing  nation.  We  have  good  reason  to  believe 
that  had  the  credit  been  perfect,  the  money  would  not 
have  depreciated  until  over-issued,  especially  if  it  had 
full  legal-tender  qualities  and  was  not.  subject  to  the 
manipulations  of  speculating  financiers. 


A  BREED  OF  BARREN  METAL  187 

Confederate  money  was  founded  on  poor  credit,  de- 
generating into  none  at  all,  was  over-issued  and  coun- 
terfeited, and  hence  is  no  criterion  of  the  fea.sihility  of 
a  credit  currency  founded  on  good  credit  and  isi^ued  up 
to  the  limit  required  for  business. 

The  French  assignats  come  the  nearest  to  being  an 
example  of  pure  credit  money,  but  the  inadequate 
measures  taken  for  their  redemption,  the  want  of  a 
guide  as  to  the  bulk  which  was  needed  in  the  country, 
and  the  very  precarious  state  of  the  issuing  nation  all 
conspired  to  place  the  system  in  bad  repute.  In  this 
instance,  as  in  all  others,  conspiracy  of  the  Hnanciers 
of  the  world  against  any  form  of  currency  which 
threatened  to  dethrone  the  dominating  influence  of  the 
precious  metals,  had  much  to  do  with  the  overthrow  of 
the  French  currency  system.  Counterfeiting  also 
played  a  very  important  part.  The  Continental  cur- 
rency of  America,  as  well  as  the  French  assignats,  was 
counterfeited  to  an  enorm()usextent,and  this  had  much 
to  do  with  the  final  worth lessness  of  both.  Yet  tiiey 
both  served  their  purpose.  Without  the  Continental 
money  the  American  Revolution  could  never  have  been 
brought  to  a  successful  issue.  Without  the  forced  loans 
from  the  nobles  which  were  obtained  largely  through 
the  assignats,  it  is  doubtful  if  revolutionary  France 
could  have  kept  feudal  and  monarchical  JEurope  at 
bay.  The  effect  of  decentralizaticjn  produced  by  the 
assignats  was  a  boon  to  France.  The  result  of  the  War 
of  the  Rebellion  was  largely  atfected  by  the  issue  of 
paper  currency.  But  if  all  of  these  were  absolute  fail- 
ures that  fact  would  not  ]n"ove  the  im|)ra('ticability  of 
the  proposed  current-y. 

This  all  goes  to  show  that  the  fact  of  a  currency  be- 
ing ])aper  is  nothing  against  it,  as  thn  weakness  of  all 
form*ir  issuiss  of  paper  currency  is  readily  explainable 
on  the  ground  of  the  weakness  of  the  prnK'i])le  on  which 
the  issue  rested.  A  pap(;r  currency  resting  on  a  s(Uind 
basis  may  be  the  best  currency  in  the  world. 

If  paper  currency  is  so  useless,  why  is  it  that  at  times 
of  greatest  nati«uial  hazard  it  is  always  resorted  to?  If 
metallic  money  is  so  much  more  stable,  why  did  we  not 


188  A  BREED  OF  BARREN  METAL 

stick  to  it  in  our  struggle  for  national  life  and  lat(3r  for 
national  existence?  The  fact  is,  metallic  currency  proved 
itself  inadequate  before  either  struggle  had  fairly  be- 
gun, and  the  much  abused  pappr  was  relied  upon  to 
tide  over  a  crisis  where  commodity  currency  failed. 

Other  countries  have  had  the  «ame  experience.  Eng- 
land had  to  abandon  specie  in  her  Napoleonic  wars  and 
paper  currency  was  her  only  refuge.  It  was  not  the 
lirst  time  that  she  had  to  resort  to  like  measures.  The 
French  Republic  had  often  the  same  experience.  In 
time  of  desperate  war  Holland  adopted  much  the  same 
plan  as  I  propose.  If  the  history  of  finance  has  taught 
one  lesson  more  plainly  than  all  others,  it  is  that  a 
metallic  currency  is  utterly  unreliable  in  times  of  na- 
tional calamity. "  The  phenomenon  is  easily  explained. 
Metallic  money  is  the  safest  and  easiest  sort  of  prop- 
erty to  hoard.  All  who  can,  will  in  times  of  national 
or  "financial  disaster  turn  as  much  as  possible  of  their 
surplus  property  into  gold  and  silver.  There  is  always 
sufficient  surplus  wealth  to  appropriate  all  of  the  money 
metal  in  circulation,  and  in  times  of  pressure  a  Jiation 
with  a  metallic  currency  is  left  practically  without  a 
circulating  medium.  That  which  escapes  the  miser 
gets  into  the  hands  of  the  speculator,  who  uses  it  for 
extortion  and  places  himself  in  such  a  position  that 
when  peace  comes  he  may  reap  a  harvest. 

But  we  do  not  have  to  wait  for  times  of  war  to  show 
the  inconsistency  of  metallic  money  advocates.  The 
apostles  of  the  gold  mania,  the  very  bankers  who  a 
year  or  more  ago  clamored  so  loudly  for  gold,  have 
lately  put  forward  a  plan  to  supply  the  nation  with  a 
paper  currency.  Their  idea  seems  to  be  that  paper  is 
very  good  if  the  issue  is  under  their  control  and  made 
in  such  a  manner  as  to  allow  them  to  reap  a  substantial 
benefit.  Let  metallic  money  advocates  point  out  a 
country  where  metallic  currency  has  served  all  the  needs 
of  trade  in  times  of  peace,  or  met  the  exigencies  of  war, 
and  we  will  then  be  ready  to  listen  to  their  tirades 
against  paper  money  because  it  is  paper  money.  But 
'there  is  paper  money  and  paper  money,  and  because 
wild  schemes  of  unlimited  or  arbitrary  issue  of  paper 


A  BREED  OF  BARREN  METAL  180 

money  are  suliject  to  criticism,  is  no  reason  why  we 
should  doubt  paper  money  fully  secured  and  issued  only 
as  demanded  by  the  exigencies  of  trade. 

The  money  proposed  by  the  bankers  is  quite  as  unre- 
liable as  any  hat  issue  yet  concocted.  What  has  the 
amount  of  banking  capital  to  do  with  the  volume  of 
exchanges  carried  on  within  a  year?  One  is  no  crite- 
rion of  the  other. 

The  supply  of  the  proposed  currency  must  always 
equal  the  demand.  Supply  and  demand  in  general  are 
always  equal.  Any  dollar's  worth  of  wealth  may  have 
issued  thereon  a  dollar  for  effective  demand,  and, there- 
fore, one  cannot  imagine  a  case  where  a  demand  for 
money  will  go  unsupplied.  The  currency  is  issued  on 
wealtli  intended  to  supply  a  demand  only, and  therefore 
theje  can  be  no  redundancy  of  currency.  The  criterion 
is  whether  the  wealth  is  for  sale.  After  money  has 
performed  its  function  of  exchanging  wealth  it  is  with- 
drawn from  the  circulation  simultaneously  with  the 
wealth  which  it  exchanges,  making  over-issue'  impossi- 
ble. No  commodity  money  can  be  regulated  in  that 
way,  for  the  value  of  one  or  two  commodities  nuist  be 
less  than  the  value  of  all  other  commodities,  and  as  all 
other  commodities  must  have  that  one  commodity  for 
a  representative,  the  demand  must  necessarily  exceed 
the  supply.  This  is  still  true  even  when  we  consider 
that  demand  for  currency  is  made  only  by  commodities 
for  sale.  It  does  not  help  matters  to  say  that  the  whole 
hoard  of  gold  or  silver  is  set  over  against  the  commodi- 
ties being  exchanged  at  any  onetime  If  a  whole  year's 
product  is  n(jt  exchanged  at  one  time,  neither  is  the 
whole  volume  of  m<jney  mediating,  or  capable  of  medi- 
ating exchanges  at  any  one  time  The  bulk  of  the 
currency  is  usually  out  of  active  use,juHt  as  the  bulk  of 
goods  is  out  of  active  trade,  A  single  connnodity  money 
must  necessarily  be  subject  to  all  the  lluctualions  of 
the  commodity  which  composes  it. 

All  commodities  taken  together  can  never  fluctuate 
in  exchange  value.  Thtjy  can  change  in  respect  to  one 
thing  only:  the  hibor  by  which  they  are  produc(!(i. 
However  much  more  (^ll'ective  that  labor  mav    b'C'mK!, 


190  A  BREED  OE  BAKKEN  METAL 

the  same  relative  productive  ettort  will  ahva^'s  com- 
mand from  nature  the  same  relative  remuneration.  It 
is  only  where  the  idler  steps  in  and  takes  a  portion  of 
the  production,  that  this  law  is  modified.  A  money 
issue  founded  on  all  commodities  can,  then,  never  fluc- 
tuate. There  could  no  more  be  too  great  a  volume  of 
such  a  currency  than  there  can  be  too  great  a  volume  of 
commodities  in  general.  Every  dollar  would  represent 
a  dollar's  worth  of  wealth  capable  of  being  purchased 
by  that  dollar. 


CHAPTER  XXIX. 

The  System  Continued — The  money  standard  of  the  proposed  system — Gold 
as  a  standard — Its  fatal  defects — Contracts  made  for  payment  in  gold — Gold 
not  a  standard^  but  a  value  denominator— A  fluctuating  standard  radically 
faulty — The  real  standard — Objections  noticed — A  fixed  quantity  of  human  ef- 
fort the  real  standard — How  to  arrive  at  such  a  standard — Buying  and  selling— 
But  two  factors  in  production. 

The  scales  of  justice  are  balanced  alike  for  all. 

There  is  no  difficulty  about  establisliiDg  the  proposed 
money  standard.  Gold  is  not  properly  a  standard  a  t 
all,  for  it  is  subject  to  fluctuation.  The  very  fact  that 
it  is  used  as  money  makes  its  price  more  unstable  than 
it  otherwise  would  be.  The  supply  is  limited.  The 
volume  of  the  metal  produced  in  any  one  year  is  insig- 
nificant as  compared  with  the  volume  in  actual  exist- 
ence, so  that  the  price  is  regulated  scarcely  at  all  by 
the  cost  of  production  and  depends  almost  totally  on 
supply  and  demand.  This  is  very  precarious.  The 
supply  of  gold  is  ridiculously  insufficient,  as  we  have 
seen,  to  carry  on  exchanges,  and  hence  the  unsatisfied 
demand  must  make  it  tend  rapidly  upward  until  there 
is  some  new  deposit  discovered,  when  the  fall  is  sharp. 
In  times  of  pressurci  this  fluctuation  is  accentuated  by 
speculative  manipulation,  when  tiie  price  of  the  metal 
often  changes  several  hundredths  in  a  few  days.  Thus 
dnbts  are  i)uid  by  a  diir<a-('nt  standard  from  that  by 
which  they  are  contracted.  It  will  take  more  iron  or 
coal  or  wool  to  pay  a  debt,  than  could  be  purchased  for 
the  money  borrowed  at  the  time  at  which  it  was  bor- 
rowed The  creditor  is  made  a  present  of  the  amount 
of  the  gold  appreciation,  a  present  which  for  the  past 
twenty  years  amounted;  on  an  average,  to  more  than 
two  ])er  cent  per  annum. 

While  there  may  be  a  general    Ihiduat  inn    in    money 
prices,  tiiere  can  br'   uo  general    lluctuation     in    value. 

I'Jl 


U)2  A    BREED    OF    BARREN    METAL 

Where  the  money  prices  of  all  staple  articles  fall,  the 
fact  is  that  values  remain  the  same  and  the  money  ap- 
preciates. Values  being  relative,  a  general  rise  or  fall 
involves  a  contradiction.  There  can  be  no  general  rise 
or  fall  in  values  as  compared  with  any  except  the  labor 
standard.  If  by  the  use  of  machinery  all  articles  can 
be  produced  with  less  labor,  that  does  not  change  their 
relation  to  each  other  and  hence  their  value.  For  this 
reason,  the  gold  advocates  who  claim  that  gold  remains 
stationar}'  in  value  while  all  other  articles  depreciate, 
make  a  statement  which  is  misleading  if  not  absolutely 
false  Probably  it  takes  no  more  labor  to  produce  an 
ounce  of  gold  now  than  it  did  twenty  years  ago,  but 
the  laljor  now  required  to  produce  an  ounce  of  gold  is 
certainly  greater  in  comparison  with  the  labor  required 
to  produce  a  bushel  of  wheat,  or  a  pair  of  shoes,  or  a 
coat,  or  a  chair,  or  a  carriage, than  it  was  twenty  years 
ago.  Hence  gold  is  a  false  standard  for  gauging  the  ob- 
ligations of  debtor  and  creditor,  for  it  is  with  \\heat,  or 
shoes,  or  coats,  or  chairs,  or  carriages  or  some  other  ar- 
ticle of  production  that  debts  are  really  paid. 

It  is  asserted  that  contracts  are  made  for  payment 
in  gold  and  that  hence  the  debtor  but  pays  what  he 
really  owes  and  has  nothing  to  complain  of.  Such  a 
statement  begs  the  question  as  to  an  injustice-working 
currency.  When  one  contracts  a  debt  he  intends  to 
contract  to  pay  in  principal  just  what  he  received.  Our 
currency  systems  are  supposed  to  be  especially  designed 
for  the  purpose  of  making  contracts  exact  in  this  re- 
spect. If  then  by  a  stealthy  appreciation  ot  the  cur- 
rency, one  is  obliged  to  pay  back  more  than  he  has 
received,  an  injustice  is  done  him.  Even  though  what 
he  pays  back  costs  him  nogreater  labor  effort  than  what 
he  received  would  have  cost  him  at  the  time  he  received 
it,  he  is  done  an  injustice  if  what  he  is  obliged  to  re- 
turn is  capable  of  su])plying  a  greater  number  of  wants, 
or  of  purchasing  a  greater  numlier  of  commodities  than 
what  he  received.  Otherwise  we  must  hold  that  the 
creditor  class  is  entitled  to  all  return  for  increased 
effectiveness' of  improved  machinery.  It  is  labor  which 
produces  this  effectiveness. 


A  BREED  OF  BARREN  METAL  193 

In  fact  gold  is  not  a  standard  at  all,  but  a  sort  of 
rough  value  denominator;  and  the  exchanges  made 
with  gold  on  a  gold  basis  are  merely  barter,  a  trading 
of  commodities,  an  im])rovement  on  primitive  barter 
only  because  of  the  fact  that  gold  is  more  readily  di- 
visible and  portable  than  the  average  commodity. 

A  fluctuating  standard  must  be  radically  faulty. 
What  would  we  say  of  a  yardstick  which  would  })o 
thirty-six  inches  this  year  and  thirty-nine  the  next;  or 
a  pound  which  would  contain  sixteen  ounces  this  year 
and  eighteen  the  next?  Yet  this  is  the  exact  position  of 
the  gold  money  standard.  And  the  demand  for  gold 
has  so  outrun  the  supply  that  the  gold  dollar  must  ever 
remain,  the  yardstick  of  increasing  length,  the  pound 
of  increasing  weight.  The  scramble  for  the  meager 
supply  must  forever  push  the  price  upward.  Were  gold 
not  the  tool  of  misers,  usurers  and  monopolists,  the 
whole  product  might  be  profitably  used  in  the  arts. 

There  is  but  one  standard  jn  the  world  which  does 
not  change  and  never  can:  a  fixed  quantity  of  the  same 
quality  of  human  effort.  This  standard  has  always 
determined  the  value  of  commodities  in  general  and 
always  will.  Suppl}'  and  demand  may  for  a  time  affect 
the  price  of  this  or  tJiat  commodity.  (Where  the  de- 
mand is  artificially  regulated,  as  with  gold,  and  the 
yearly  pnjduct  is  insignificant  as  compared  with  that  on 
hand,  and  tlie  commodity  itself  is  well  nigh  imperish- 
able, demand  may  be  the  chief  factor  in  determining 
the  price.)  iJut  the  averagovalue  and  hence  the  price 
of  any  commodity  is  always  dependent  upon  this  prin- 
ciple: What  relative  amount  of  human  efi'ort  of  a  cer- 
tain quality  did  it  take  to  produce  that  commodity  as 
(•f)mi)ared  with  that  which  you  seek  to  exchange  for  it? 
I.al)or,  the  producjer  of  all  man-made  wealth,  is  the  only 
1  rue  measure  of  value.  Human  effort  in  general  may 
oe  remunerated  by  greater  results  this  year  than  last, 
l)ut  an  hour's  toil,  whether  of  brain  or  hand,  is  an 
hour's  toil  this  year,  it  was  last  and  it  will  be  as  long 
as  th(;re  is  a  toiling  hmnaii.  Man's  judgment  of  the 
value  of  any  article  depends  wholly  on  the  effort  re- 
<iuired  of  him  to  secrure  that  article.  Value  In  nina  is 
'laterprclrd  only  in  terms  of  loll. 


194  A  BREED  OF  BARREN  METAL 

A  writer  says  that  labor  is  an  act  and  not  a  quantity 
and  can  therefore  never  be  used  as  a  money  standard. 
It  would  be  interesting  to  know  just  what  he  means  by 
the  assertion.  If  it  is  that  labor  lias  not  quantity,  then 
the  statement  is  manifestly  false.  Labor  is  nothing 
more  nor  less  than  productive  elfort.  Productive  effort 
has  quantity  as  much  as  an  electric  current  or  the  work- 
ing force  of  a  steam-engine.  The  ottort  of  a  day  is 
greater  in  quantity  than  the  effort  of  an  hour,provided 
both  efforts  be  of  the  same  intensity.  We  measure  the 
force  of  currents  of  electricity  by  results.  We  measure 
the  working  force  of  machines  by  results.  We  have  a 
unit  by  which  this  is  done,  an  actual  tangible  unit. 
Why  can  we  not  measure  labor  by  results  and  in  that 
way  fix  a  unit  which  may  serve  as  a  measure  of  all  re- 
sults of  labor?  That  would  be  a  standard  of  value,  a 
money  standard.  Whether  in  paying  wages  we  pay  for 
labor' effort  or  for  the  goods,  is  entirely  immaterial. 
Our  judgment  must  in  both  cases  be  based  on  tangible 
results. 

The  same  author  gets  the  cart  squarely  before  the 
horse  when  he  says  that  it  is  the  product  which  imparts 
value  to  labor.  The  fact  is  that  labor  imparts  value  to 
product.  That  which  requires  no  labor,  unless  monop- 
olized, never  has  any  (exchangeable)  value.  That  which 
requires  labor  has  always  more  or  less  value  and  usually 
in  direct  proportion  to  the  amount  of  labor  expended. 
And  as  a  matter  of  fact  labor  has  value,  for  it  is  every 
day  in  practice  exchanged  for  valuable  substantial  com- 
modities. The  hair-splitting  is  as  unnecessary  as  erro- 
neous. The  author  is  simply  misled  by  the  fact  that 
labor  must  necessarily  be  judged  by  results  and  rewarded 
accordingly.  Land  is  not  an  example  of  value  without 
labor,  for  "it  is  the  labor-produced  civilization  on  earth 
which  has  given  value  (exchange)  to  land. 

The  ideal  measure  of  value,as  well  as  the  ideal  money 
standard,  is  a  fixed  quantity  of  human  effort  of  a  cer- 
tain quality.  This  is  really  the  yardstick  by  which  the 
results  of  all  human  effort  are  measured.  But  we  are 
too  ignorant  or  unskillful  to  determine  the  quality  of 
labor  directly.     We   must  therefore  judge  by  results. 


A  BREED  OF  BARREN  METAL  195 

and  in  this  way  we  may  closely  approximate  the  ideal 
standard. 

If  there  were  no  debtors  and  no  creditors,  there  would 
be  no  necessity  of  fixing  a  tangible  value  for  the  labor- 
effort  dollar.  On  a  strictly  cash  system,  the  dollar 
may  be  made  in  terms  the  value  of  the  result  of  an 
average  hour's  toil, and  the  market  price  of  the  commod- 
ity sought  be  left  to  determine  what  that  value  would 
be  at  any  particular  time.  Currency  loans  would  be 
paid  in  currency  founded  on  wealth  ii)  the  process  of 
exchange.  The  actual  money  would  be  founded  on  the 
wealth  which  the  debtor  had  added  to  the  common 
stock,  and  it  is  with  this  that  he  would  actually  pay 
the  creditor.  The  creditor  would  not  receive  that  com- 
modity, but  the  right  to  demand  in  the  market  any 
commodity  which  he  chose,  provided  he  paid  the  mar- 
ket price  therefor.  The  creditor  could  demand  neitlier 
wheat,  nor  corn,  nor  coal,  nor  iron,  nor  gold,  directly 
from  the  debtor  in  any  fixed  quantities,  but  he  could 
demand  and  'Secure  that  debtor's  right  to  demand  coal, 
or  iron,  or  wheat,  or  gold,  which  at  their  market  price 
would  be  represented  by  the  number  of  dollars  called 
for  by  the  contract  of  indebtedness.  If  the  same  dollars 
paid  for  all  commodities  and  all  services  at  all  times, 
it  would  be  immaterial  what  the  ultimate  standard  of 
the  dollar  was.  Its  value  would  be  determined  in  every 
exchange. 

But  as  there  are  debts,it  would  be  necessary  that  the 
labor  currency  unit  should  correspond  closely  witli  the 
dollar  now  in  use,  or  rather  what  the  dollar  should  be. 
This,  it  was  seen,  would  be  the  standard  of  1873. 

It  takes  a  certain  amount  of  labor  to  produce  a  dol- 
lar's worth  of  product  in  any  and  all  industries.  That 
neither  debtor  nor  creditor  should  suffer  i)y  the  j)ro- 
posed  change  of  standard,  we  should  d(!termiiie  what 
(piantity  of  labf)r  is  on  an  average  required  to  i)r()duce 
a  dollar's  worth  of  commodity,  and  we  should  make 
that  quantity  (jf  labor  the  dcjllju*. 

There  would  be  no  difliculty  in  ascerlaining  what 
such  quantity  of  labor  is.  The  mat(;rial  is  at  hand. 
One  caji  ascertain  with  accuracy  the  average  amount  of 


196  A  BREED  OF  BARREN  METAL 

toil  expended  in  producing  a  l)ushel  of  wheat,  a  case  of 
shoes,  a  bolt  of  cloth,  a  ton  of  iron,  a  ton  of  coal,  a 
plow,  a  locomotive,  etc.  Let  the  amount  of  toil  re- 
quired in  each  case  be  compared  with  the  average  price 
of  the  article  in  four  or  five  markets,  and  from  this  it 
would  be  easy  to  determine  the  average  amount  of  labor 
required  to  jaroduce  a  dollar's  worth  of  goods.  This 
could  be  made  the  money  standard  and  there  would  be 
no  perceptible  change.  If  it  was  thought  best,  the  stand- 
ard might  be  expressed  iii  terms  of  product,  but  I  deem 
labor  terms  the  best  for  the  expression  of  tlie  standard. 
In  practice,  the  standard  would  mean  simply  that  the 
holder  of  a  dollar  is  entitled  to  the  product  of  a  cer- 
tain labor  effort  in  the  industry  by  which  the  commod- 
ity sought  has  been  produced.  What  the  amount  of 
the  product  would  be,  would  be  determined  b}"  market 
price. 

Buying  and  selling  is  merely  a  convenient  mode  of 
trading  commodities  for  one  another.  The  price  of -eaclj 
fixes  the  price  of  the  other,  and  the  dollar  is  simply  an 
expression  of  the  relative  amount  of  labor  in  each. 

The  standard  once  fixed,  it  need  never  change.  No 
matter  how  much  more  productive  an  hour's  toil  may 
become,  it  becomes  no  more  productive  relatively  than 
an  other  hour's  toil  of  the  same  quality.  All  values 
are  relative,  all  remuneration  is  relative.  No  matter 
how  many  more  wants  his  toil  will  satisfy, any  particular 
laborer  would  receive  no  more  remuneration  as  com- 
l^ared  with  any  like  laborer  than  he  does  now.  There 
would  be  so  little  long-time  borrowing  that  the  stand- 
ard would  give  no  material  advantage  to  one  over  an- 
other. 

Of  course  I  recognize  but  two  factors  in  production : 
the  laborer  and  the  spontaneous  forces  of  nature.  The 
latter  claim  no  reward,  the  former  should  therefore  have 
the  whole  product.  Everybody  capable  of  producing 
should  labor, and  the  forces  of  nature  should  be  so  free 
from  appropriation  that  they  may  distribute  their  favors 
alike  to  all.  Distribution  would  soon  become  simple, 
and  the  relative  remuneration  of  different  laborers  be 
the  only  question  to  be  solved. 


CHAPTER  XXX. 

Objections  Answered— Impracticability — Deception  in  weiglit  and  rjeasure— 
Prices  of  goods — Security  a  deterrent  to  trade — A  refusal  to  sell  goods  after 
money  had  been  issued  thereon — Would  increase  the  army  of  office-holders- 
Political  corruption — A  remedy  for  that — The  development  of  the  principle 
of  local  self-government — Distrust  of  the  people  and  its  result — The  basis  of 
the  spoils  system — The  appointive  power — An  irresponsible  judiciary — Election 
by  select  bodies— The  Electoral  College — Money  in  politics— Warehouse 
receipts — Security— Bonds  and  stocks — Goods  in  transit — Revenue — Silver 
and  gold. 

We  always  find  excuses  for  resisting  disagreeable  truths. 

The  first  olDJection  which  is  naturally  directed  to  the 
proposed  currency,  is  that  it  is  impracticable.  Wliere 
are  the  specifications?  What  particular  portion  is  im- 
practicable? Is  it  the  nationalization  of  the  banks? 
The  United  States  has  found  it  practicaljle  to  establish 
postoftices  in  every  village  and  hamlet  in  the  land;  to 
provide  officers  and  employes  therefor  and  to  see  that 
the  business  of  carrying  and  distril)uting  the  mails  is 
properly  carried  on.  The  establisliment  of  a  national 
bank  .system  would  be  connected  with  little  more  ex- 
pense; it  would  be  little  more  complicated  and  it  wouUl 
be  much  more  closely  related  to  government  functions 
than  is  the  carrying  of  the  mails.  The  United  States 
now  manufactures  all  of  tlie  currency,  secures  it  and 
superintends  its  use.  Under  the  proposed  system,  it 
would  be  asked  to  do  no  more  in  that  respect.  It  has 
charge  of  all  national  bank  accounts;  it  primarily  is- 
sues all  circulating  notes.  And  for  whose  b(uiefit? 
Largf'ly  for  the  benefit  of  private  individuals.  All  that 
wouhl  l)e  necessary  in  addition,  is  the  local  ollicers, 
with  access  to  town,  county  and  munici])al  records,  so 
that  the  value  of  this  or  that  security  might  easily  be 
ascertained.  TIm-  weightn's  and  gangers  would  be  \mvi 
of  the  local  force. 

Ijanks  ccjuld  not    possibly    In-    iiiDre    iuuikm'ous    than 

li»7 


198  A  BREED  OF  BARREN  METAL 

postoffices,  and  a  government  capable  of  directing  the 
work  of  postmasters  would  be  capable  of  directing  the 
work  of  bankers. 

The  bank  officers  and  post  officers  may  be  the  same  in 
small  towns,and  thus  the  expense  of  both  services  might 
be  cut  down.  The  same  buildings,  too,  might  be  used 
for  both  concerns. 

Nearly  all  commodities  are  now  stored  before  selling, 
and  the  only  additional  requirement  would  be  to  have 
the  warehouse  bonded  and  registered. 

All  commodities  must  now  be  weighed,  measured  or 
estimated  in  some  manner.  The  price  of  all  commodi- 
ties must  now  be  ascertained  before  the  commodities 
can  be  sold.  The  storing,  weighing  or  gauging  are  not 
new  requirements. 

Deception  in  weighing,  gauging  or  the  issuing  of  re- 
ceipts would  be  difficult,  as  the  banker  would  be  a  check 
on  the  weigher  or  ganger  and  the  weigher  or  gauger  on 
the  banker.  The  warehouse  man  would  be  a  check  on 
both  and  the  owner  of  the  produce  on  all.  Collusion 
would  not  help,  as  the  amount  of  the  money  issued 
must  be  returned  before  the  produce  could  be  taken 
from  the  warehouse  or  assigned,  and  there  would  there- 
fore be  no  object  in  overestimating  price  or  weight. 
The  bond  of  security  would  make  it  utterly  impossi- 
ble that  the  public  should  be  swindled  or  sustain  any 
loss  whatever.  Officials  without  any  pecuniary  interest 
in  falsifying  would  be  less  prone  to  dishonesty  than  the 
officials  under  the  present  system,  who  have  a  direct 
pecuniary  interest  in  deceiving. 

The  currency  would  be  issued  on  the  price  of  the 
goods  in  the  market  at  which  the  bank  was  located,  in 
the  quantities  in  which  the  goods  were  offered  at  the 
warehouse.  Whether  the  price  v/ould  be  the  wholesale 
or  the  retail  price  must  depend  entirely  on  the  local 
market  for  the  goods  or  their  value  at  the  banking  town. 
Thus,  there  must  in  practice  be  a  minimum  amount 
of  goods  capable  of  being  stored  as  a  ])asis  for  a  money 
issue.  This  must  depend  on  the  locality  in  which  the 
bank  operated.  With  agricultural  customers,  the  min- 
imum must  be  as  low  as  twenty-five  dollars  or  there- 


A  BREED  OF  BARREN  METAL  199 

about,  while  in  a  manufacturing  community  where  es- 
tablishments were  large  the  limit  might  be  much  higher. 
The  price  would  be  reckoned  on  the  lot  of  goods  stored, 
whatever  that  may  be.  If  wheat,  why,  wheat  in  the  local 
market.  If  merchandise,  stored  by  a  local  merchant, 
then  the  price  of  the  goods  would  be  the  price  of  that 
bulk  in  the  local  market. 

In  practice,  no  less  than  the  minimum  amount  of 
goods  allowed  to  be  stored  as  a  basis  of  money  issue 
by  any  individual,  should  be  allowed  released  or  assigned 
at  any  one  time  Thus  the  storing  of  goods  would  in 
no  way  interfere  with  their  sale.  A  merchant  might 
keep  his  surplus  stock  in  the  bonded  warehouse  and 
have  money  issued  thereon  and  release  it  in  installments 
as  he  wanted  to  sell  it.  So  might  a  manufacturer. 
In  that  way  nearly  the  whole  volume  of  wealth  offered 
for  sale  might  serve  as  a  basis  for  currency.  Samples 
alone  ^\  uuld  be  required  in  salerooms. 

It  is  not  necessary  that  every  dollar's  worth  of  goods 
shall  actually  be  represented  by  a  dollar  in  currency, 
but  it  is  necessary  that  every  dollar  in  goods  may  be 
represented  by  a  dollar  in  currency  if  required  for  the 
purpose  of  exchange.  Thus  the  volume  would  regulate 
itself,  there  would  be  no  wealth  to  exchange  which 
might  not  secure  the  dollar  to  exchange  it,  but  if  it 
could  be  exchanged  without  calling  for  the  issue  of 
currency,  the  exchange  would  be  allowed. 

The  warehouse  receipts  would  not  be  the  sole  security. 
The  fixed  bonds  would  be  sufficient  for  that,  so  that  the 
former  could  be  regulated  so  as  to  be  readily  assignable 
and  cause  no  friction  in  trade.  They  might  be  issued 
in  duplicate,  the  copy  being  made  assignable,  in  order 
to  facilitate  trade. 

The  security  required  could  not  be  a  deterrent  to 
trade.  One  must  give  security  before  borrowing  or 
opening  a  bank  account.  He  must  have  a  deposit  to 
have  his  check  certified.  The  gov(!riiment  banks  would 
ask  no  more  l)efore  certifying  orders  for  goods.  It 
would  not  be  necossary  fo  give  bonds  for  every  transac- 
tion. A  bond  could  be  filed  for  ay(.'arorany  other  fixed 
])eriod.  to  cover  the  largest  amount  of  currency  refpiired 


200  A  BREED  OF  BARREN  METAL 

at  any  one  time.  It  might  be  made  low  enough,  accord- 
ing to  the  locality, to  cover  the  farmer's  load  of  produce, 
or  4iigh  enough  to  secure  the  price  of  a  steamship.  If 
people  would  not  pledge  their  goods  that  would  be  an 
indication  that  they  could  exchange  them  without  it, 
■while  no  one  who  had  goods  to  pledge  would  be  allowed 
to  suffer  for  lack  of  money. 

All  would  get  money  on  their  goods  and  refuse  to  sell? 
That  objection  is  puerile.  Money  is  only  a  means  and 
a  medium  of  exchange.  The  business  man  wants 
money  for  the  purpose  of  supplying  his  needs.  When  he 
gets  the  money  he  will  at  once  go  into  the  market  for 
that  purpose,  and  where  buyers  are  there  also  will 
sellers  be.  At  least  that  has  always  been  the  experience 
of  the  business  world.  The  very  first  sale  made  would 
start  the  ball  rolling  and  matters  would  go  on  just  as 
at  present.  While  each  man  would  be  obliged  to  pay 
insurance  on  his  goods  and  run  the  risk  of  holding 
■  them  as  now,  while  he  would  be  obliged  to  redeem 
them  after  a  fixed  period,  he  would  be  just  as  prompt 
as  at  present  to  take  advantage  of  the  markets  and  sell. 
The  amount  of  perfect  security  which  he  could  give 
above  the  value  of  his  goods  in  store  would  limit  the 
amount  of  goods  which  he  could  hoard.  Each  man 
would  soon  reach  a  point  where  he  would  be  obliged  to 
sell. 

But,  it  is  said,  the  establishing  of  the  proposed  bank- 
ing system  would  increase  b}"  thousands  the  army  of 
office-halders,  and  give  spoilsmen  a  power  for  corrup- 
tion which  nothing  could  withstand.  This  need  not  be 
the  case.  We  have  alread}^  reached  a  point  where  good 
government  loudly  demands  a  radical  curtailment  of 
appointing  power  and  a  making  of  all  officials  directly 
responsible  to  the  people.  Elective  officers,  from  the 
president  down,  spend  more  time  in  distributing  spoils 
for  the  reward  of  henchmen,  or  to  wrongfully  intluenco 
government,  than  they  do  in  dealing  with  the  real  prob- 
lems of  government.  The  remedy  is  clearly  indicated. 
Go  back  to  the  principles  of  local  self-government. 
Make  postmasters,  attorneys,  judges,  bankers  (under 
the  proposed  system),  and  all  other  officers  not  em- 


BREED  OF  BARREN  METAL  201 

ployed  at  the  seat  of  government,  elective  by  the  con- 
stituencies which  they  are  to  serve.  Make  all  department 
clerks  elective  and  apportioned  to  congressional  dis- 
tricts. 

Let  us  digress  a  moment  and  take  a  glance  at  the 
constitutional  changes  necessary,  if  the  people  would 
retain  their  hold  even  on  the  present  governmental 
powers. 

The  constitution  of  the  United  States,  like  all  schemes 
of  popular  government,  is  founded  on  the  equal  civil 
rights  of  all  men.  This  implies  that  all  men  shall 
have  a  share  in  the  government,  and  that  no  privileged 
class  shall  dictate  b}"  the  right  of  privilege  what  the 
government  shall  be.  Although  the  foundation  princi- 
ple can  not  be  denied  by  advocates  of  popular  govern- 
ment, there  were  found  in  preparing  the  constitution 
of  the  United  States,  insuperable  obstacles  to  its  com- 
plete realization.  A  party  was  found,  then  as  now,  who 
distrusted  the  people  at  large  and  set  about  placing 
checks  in  the  constitution  which  might,  under  certain 
conditions,  serve  to  negative  the  will  of  the  people  or 
set  aside  a  popular  verdict.  This  party  seems  to  have 
lost  sight  of  the  lesson  of  history:  that  no  ruler  has 
ever  governed  better  than  he  was  compelled  to  by 
popular  sentiment,  and  that  irresponsible  power  is  in- 
variably used  for  selfish  ends  inimical  to  the  welfare  of 
the  many.  All  power  not  coming  frcjm  the  people  is 
irresponsible,  all  checks  used  to  negative  the  will  of 
the  people  are  autocratic.  They  have  proved  mischiev- 
ous as  vain,  A  stream  will  not  rise  aliove  its  foun- 
tain-head, and  especially  is  this  true  of  the  siream  of 
popular  government. 

It  was  in  deference  to  those  who  distrusted  tl>e  peo- 
ple at  large  that  provision  was  made  in  the  constitution 
for  the  electoral  college,  the  h'gislative  election  of  sena- 
tors, an  ap[)ointive,  irresponsible,  life-tenufe  judiciary'', 
and  an  almost  unlimited  api)ointive  power  by  elective 
oflficers.  Experience  has  shown  that  tliesi;  are  the  very 
provisions  around  which  clusti.^r  nine-tenths  of  the 
fraud,  trickery,  corruption  and  dissatisfaction  that 
beset  popular  government. 


202  A  BREED  OF  BARREN  METAL 

From  the  indiscriminate  appointive  power  we  have 
the  spoils  system,  with  all  the  attendant  evils  of  ward 
politician,  voter-corruption  and  encroachment  of  exec- 
utive on  legislative  power. 

From  the  irresponsible  life-tenure  judiciary  we  have 
shameless  obsequiousness  of  the  bench  to  the  money 
power,  the  judicial  trampling  on  popular  rights,  and 
bench  legislation  claiming  supremacy  over  all  other 
expressions  of  governmental  power. 

To  legislative  election  we  owe  a  plutocratic  senate, 
tainted  at  its  very  inception  with  the  stigma  of  corrup- 
tion, irresponsive  to  the  wishes  or  interest  of  the  peo- 
ple, and  hedged  around  with  the  impotence  of  obsolete 
form. 

The  elective  college  has  practically  placed  the  presi- 
dency in  the  hands  of  a  few  machine  politicians  of  New 
York,  Illinois  and  Ohio. 

These  things  must  be  changed  in  the  light  of  the 
lessons  of  our  experience.  The  constitution  was  made 
for  the  people,  rather  than  the  people  for  the  constitu- 
tion. The  great  authors  of  the  document  believed  that 
experience  w^ould  show  imperfections  and  provided  a 
means  of  correcting  them.  They  recognized  the  lesson 
of  history  that  if  provision  is  not  made  within  the 
constitution  for  change  it  will  be  changed  by  violence 
and  revolution.  Time  has  shown  the  imperfections  of 
this  wonderful  instrument.  Will  enlightened  Amer- 
icans continue,  Chinese-like,  to  worship  error  because 
of  its  age,  or  try  by  the  light  of  experience  to  make  the 
instrument  more  perfect,  more  adapted  to  the  wants  of 
the  XDresent? 

I  do  not  contend  for  popular  government.  In  the 
breast* of  independent  manhood,  liberty  needs  no  cham- 
pion. I  speak  to  those  who  deny  the  inherent  right  of 
any  man  or  body  of  men  to  rule  over  any  other;  who 
look  upon  a  voice  in  the  government  as  a  right  and  not 
a  privilege;  and  who  consider  that  civilization  without 
liberty  is  a  hollow  farce,  an  unreal  mockery.  Not  the 
liberty  of  licentiousness  nor  force-bred  anarchy,  but 
the  equal  liberty  of  just  citizens,  who  would  withhold 
from  no  man  that   which  they  themselves  enjoy.     Let 


A  BREED  OF  BARREN  METAL  203 

the  man  who  declares  a  voice  in  tlie  government  of 
one's  country  to  be  a  mere  privilege,  explain  from 
whence  comes  the  privilege  or  who  has  a  right  to  give 
the  privilege,  or  else  go  lay  his  sophistry  at  the  feet  of 
thrones,  where  reign  the  crime-polluted  soi-disant 
vicars  of  Providence. 

Most  of  the  necessary  constitutional  changes  have 
already  been  suggested.  They  are  opposed  only  by  that 
fossil  conservatism  which  persistently  refuses  to  recog- 
nize the  fact  of  national  progress.  With  the  race  the 
idols  of  to-day  have  beeii  the  curiosities  of  to-morrow. 
We  constantly  put  away  the  things  of  the  child,  yet  a 
revolutionized  civilization  blindly  clings  to  the  laws 
of  a  lost  century. 

It  is  not  difficult  to  point  out  these  defects  in  the 
constitution.  To  all  thinking  men,  the  vast  appointive 
power  vested  in-  executive  officers  has  become  a  dan- 
gerous menace  to  popular  government.  It  is  the  foun- 
dation of  the  spoils  system,  a  powerful  weapon  for  the 
subversion  of  popular  will,  a  fertile  source  of  dishon- 
esty and  corruption.  It  is  probably  necessary  that  the 
executive  be  allowed  to  appoint  his  cabinet  ministers 
and  confidential  secretaries,  but  here  his  elective  power 
should  end.  A  president  would  be  less  than  human, 
or  more  so,  if  you  wish,  if  he  should  refuse  to  use  his 
patronage  power  in  case  of  emergency.  It  has  been 
done  and  will  be  done  again.  Patronage  has  forced  more 
than  one  unpopular  measure  through  Congress,  and 
with  an  able  and  ambitious  executive  we  might  find  the 
legislative  branch  a  mere  appendage  to  the  executive. 
A  congressman,  unless  he  be  made  of  exceptional  stuff 
will  not  ojjpose  a  president  of  his  own  party,  when  he 
knows  doing  so  will  conjure  up  against  him  subservient 
enemies  in  evf^ry  hamlet  in  his  district.  More  than 
that,  it  will  bring  government  hostility  to  his  constit- 
uency, sly  discrimination,  which  will  bu  laid  on  the 
shoiilders  of  the  congressman,  turning  into enemicts  the 
Vf;ry  persons  he  has  taken  troubhi  to  defend.  Then 
a1  tending  to  the  claims  of  office-seekers  is  made  the 
chief  business  of  the  executive,  and  multij^licd  oliliga- 
tions  arising  from  patronage  hainpcr  ii«il  only  Hi"  |)res- 
idenl  Init  cvcrv  "fficial  in  llic  land. 


204  A  BREED  OF  BAKREN  METAL 

The  power  may  be  thrown  back  upon  the  people.  It 
would  be  an  insult  to  every  American  citizen  to  say 
that  a  time-serving  politician,  without  public  interest 
or  personal  responsibility,  is  a  better  judge  of  the  fit- 
ness of  a  postmaster  or  other  officer  at  this  or  that 
place,  than  the  constituency  which  that  official  is  to 
serve.  And  that  is  really  the  issue.  Postmasters  and 
other  local  officers  are  now  virtually  appointed  by  local 
politicians,  who  have  gained  some  hold  on  the  admin- 
istration. The  president  merely  decides  as  to  whose 
appointee  shall  have  the  place.  Every  postmaster, 
every  customs  or  revenue  officer,  every  district  attorney, 
district  judge  or  other  court  official,  every  mail  agent 
and  inspector  might  readily  be  elected  by  the  constit- 
uency which  he  serves  without  at  all  interfering  with 
the  service  which  he  is  called  upon  to  direct.  This  is 
what  must  happen  if  we  are  to  have  civil  service  re- 
form worthy  of  the  name.  The  principle  might  be  so 
extended  that  every  department  clerk  might  be  elected 
by  the  people. 

For  this  purpose  the  clerical  force  of  the  United 
States  might  be  apportioned  among  the  congressional 
districts,  which  might  be  subdivided  into  their  constit- 
uent counties.  Three  or  more  candidates  might  be 
elected  to  each  vacant  position  as  eligibles,  and  their 
final  appointment  made  to  depend  on  an  examination 
intended  to  test  their  fitness  for  the  work  required. 
After  the  examination,  the  result  of  which  should  be 
made  public,  the  eligible  standing  the  highest  should 
be  given  the  appointment.  There  should  be  no  discre- 
tion left  to  any  one  in  the  matter,  but  he  who  stood  the 
best  test  examination  should  have  the  place  as  a  mat- 
ter of  law,  the  people's  vote  in  electing  him  an  eligible 
being  the  only  recommendation  recpiired.  Vacancies 
between  elections  might  be  filled  from  the  other  eligi- 
bles. These  clerks  might  be  elected  for  long  terms,  six 
or  eight  years,  a  small  percentage  going  out  at  each 
election.  In  this  manner  the  efficiency  of  the  depart- 
ment forces  would  be  improved  and  we  would  have  civil 
service  reform  in  fact  as  well  as  in  name,  and  not  the 
farce  now  foisted  on  the  American   people.     A   more 


A  BREED  OF  BARREN  METAL  205 

imporian  consideration  than  this,  we  should  not  have 
a  class  of  life-tenure  officials,  living  as  sort  of  iaenefi- 
ciaries  of  the  government  and  entirely  out  of  sympathy 
with  work-a-day  citizens.  These  life-officials  come  to 
have  interest  in  but  one  thing — self,  and  are  ready  to 
give  temporary  allegiance  to  any  politician  who  might 
lend  them  assistance.  They  know  little  and  care  less 
about  the  condition  of  the  country  at  large.  They 
make  the  very  poorest  and  least  public-spirited  citizens. 
And  as  for  the  efficiency  which  comes  from  long 
service,  "it  is  not  readily  apparent.  It  is  notorious  that 
the  want  of  ambition  and  disposition  to  shirk  duty  de- 
veloped by  long  official  service,  makes  the  majority  of 
long-serving  clerks  less  valuable  than  men  of  little  ex- 
perience in  official  life.  Let  public  servants  in  all  ca- 
pacities frequently  touch  elbows  with  the  rank  and  file 
of  citizens.  It  will  be  found  better  for  all  concerned. 
Let  each  one's  official  record  go  before  his  electors  once 
in  a  while.  It  will  have  a  salutary  effect.  The  clerk 
would  gain,  as  he  would  have  a  fixed  term  of  employ- 
ment and  not  be  placed  on  the  anxious  seat  every  few 
months. 

With  such  an  official  force  as  this,  multiplicity  of 
forces  would  be  no  objection  to  the  nationalization  of 
banks,  railways  or  anything  else.  Besides,  it  would  be 
a  reform  which  must  be  had  to  save  popular  govern- 
ment. 

The  actions  of  federal  judges  furnish  most  flagrant 
instances  of  the  mischief  of  giving  official  autocratic 
power.  We  have  a  sort  of  tacit  legal  fiction  that  a 
judge,  like  a  king,  can  do  no  wrong.  Hence  we  have 
made  him  utterly  unaccountable  for  his  actions, for  im- 
peachment is  but  a  sort  of  pretentious  joke.  He  is 
created  by  one  man  with  the  consent  of  a  body  of  men, 
tlx-rnselves  thoroughly  undemocratic,  and  when  once 
installed  is  superior  to  his  social  creators.  And  who 
was  this  jjuragon  of  perfection  I)efore  he  ascended  the 
bench  and  put  on  the  olisolete  insignia  of  autocratic 
authority?  A  mere  lawyer  who  for  money  warped  and 
blocke'd  the  laws  of  his  country  to  further  the  selfish 
QT  iniquitous  schemes  of  his  eihployers.     He  was  prob- 


^06  A    BREED    OF    BARREN    METAL 

ably  the  hired  and  obsequious  servant  of  some  corpora- 
tion whose  profit  was  wrung  from  wrongful  levies  on 
the  toiling  i^ublic.  He  was  certainly  no  more  honest, 
upright  or  disinterested  than  other  men,  and,  no  doubt, 
often  drafted  and  advocated  the  passage  of  laws  for  the 
special  purpose  of  making  them  dead  letters  or  using 
them  to  his  own  and  his  employer's  ends  when  they 
came  to  be  enforced. 

Is  it  any  wonder,  then,  that  the  judge,  hedged  around 
by  antiquated  forms  and  illogical  precedent,  should 
continue  in  his  contempt  for  the  rights  and  int'erests  of 
the  people  and  persist  in  serving  the  special  interests 
which  have  created  his  fortunes?  Is  it  any  wonder  that 
the  plainest  intention  of  the  people  is  negatived  by 
the  judicial  dictator  and  that  corporations  laugh  a't 
legislative  enactments  from  behind  judicial  strongholds? 
Nobody  expects  perfection  in  a  lawyer.  The  ermine  does 
not  transform  him.  Often  the  reafization  of  his  ambi- 
tions depends  on  how  well  hp  serves — some  corporation. 
There  is  but  one  remedy.  Make  judges  of  all  sorts  elec- 
tive by  the  people  for  limited  terms  and  therefore  ac- 
countable to  the  people.  If  the  people  are  capable  of 
selecting  law-makers,  they  are  capable  of  selecting  law- 
interpreters.  But  whether  they  are  ca])able  of  so  doing 
they  must  judge  for.  themselves.  They  have  a  right 
to  have  their  verdicts  enforced  regardless  of  the  opin- 
ions of  the  few  as  to  the  wisdom  or  folly  of  these  ver- 
dicts. And  in  i^ractice  courts  have  not  been  found  to 
suffer  where  judges  were  made  elective  rather  than  ap- 
pointive, but,  on  the  contrary,  laws  have  been  more 
intelligently  and  jufetly  administered.  The  corrupting 
influence  of  the  appointing  power  on  the  judiciary  of 
this  country  is  notorious.  To  our  shame  be  it  said,  the 
highest  tribunal  in  the  land  has  been  bartered  as  a  re- 
ward for  corrupt  help  of  corporations,  or  for  upholding 
the  wrongful  acts  of  partisans.  But  worse  than  all  this 
the  appointive  judiciary  has  been  gradually  absorbing 
the  legislative  power,  until  the  country  is  overwhelmed 
with  a  melange  of  judge-made  law.  If  democracy  is 
to  survive  it  must  clip  the  judicial  wings,  elect  judges, 
and  make  them  accountable  to  the  people;  in  a  word, 
abolish  judicial  dictatorial  j^ower. 


A  BREED  OF  BARREN  METAL  207 

The  United  States  Senate,  instead  of  being  the  lofty, 
single-minded  institution  intended  by  its  founders,  the 
institution  which  was  to  leaven  with  wisdom  and  hon- 
esty the  crude,  passion-laden  measures  of  the  popular 
branch  of  government,  has  become  the  most  ignorant, 
corrupt  and  inefficient  branch  of  tlie  government.  Its 
actions  are  more  often  tainted  by  suspicion  of  wrong 
or  dictated  by  motives  of  self-aggrandizement  or  con- 
tempt of  popular  rights,  than  they  are  illumined  by  ex- 
perience, wisdom  or  patriotism.  Experience  has  most 
emphatically  proved  that  those  who  distrusted  the  wis- 
dom as  electors  of  the  people  at  large,  were  entirely 
inistaken. 

We  have  found  in  practice  that  the  members  of  the 
state  legislatures  are  no  more  incorruptible,  if  indeed 
more  wise  than  the  average  citizen-voter,  and  the  num- 
ber is  so  small  that  it  is  feasible  for  moneyed  interests 
to  purchase  an  election  of  them.  The  fundamental 
mistake  is  the  supposition,  negatived  by  one  hundred 
years  of  history,  that  any  select  l)ody  of  electors  is  less 
corruptible  and  wiser  than  the  electors  at  large.  The 
remedy  is,  then,  suggested  by  history.  Make  the  Senate 
elective  by  pupular  vote  and  it  will  cease  to  be  a  mil- 
lionaires' and  corporation  counsel  club,  and  become  a 
useful  branch  of  the  government.  One  can  always  attend 
to  his  own  business  better  than  any  one  else  will,  and 
this  is  true  of  the  business  of  the  whole  people  as  well 
as  an  individual.  Make  all  officers  responsible  directly 
to  the  supreme  law-making  power,  if  you  would  have 
the  will  of  the  citizen  carried  into    effect. 

The  electoral  college  has  not,  for  nearly  a  century, 
had  anything  to  do  in  practice  with  the  ])urpose  for 
whicli  it  was  established.  It  was  anotlier  case  of  dis- 
trusting the  verdict  of  the  citizens  at  large,  and  s])eed- 
ily  grew  into  tlie  most  ridicndous  farce  ever  exphjited 
in  the  name  of  popular  government.  It  is  now  the  tool 
of  the  New  York  machine  on  either  side,  and  gives 
])ower  to  a  handful  of  ))oliticians  in  that  state  to  (li<'- 
tate  a  [)rf'.sid<'nt  to  sixty-fivt-  millions  ol"  ))(M)])1(^  Tim 
convention  of  ncithf^r  i)arty  dares  ignore  Ihe  New  "^'ork 
machine'  in  the  'nake-up  oi'  tin,'  [)resi(|i'iit  ial  ticket^  for, 


208  A  BREED  OF  BARREN  METAL 

SO  far  as  ante-election  estimates  are  concerned,  as  New 
York  goes  so  goes  the  country.  The  consequence  is 
that  the  Republican  and  Democratic  nuichines  of  the 
Empire  State  nominate  the  tickets  for  Jioth  conventions. 
Let  the  people  elect  a  president  by  a  direct,  popular 
vote,  and  political  parties  would  cease  to  bid  for  the 
support  of  pivotal  states.  A  million  of  voters  in  the 
Mississippi  valley  would  have  as  much  to  say  in  the 
election  of  a  president  as  a  million  of  voters  in  New 
York.  Political  dictators  would  find  a  large  part  of 
their  occupation  gone.  Presidential  candidates  would 
be  chosen  more  with  regard  to  fitness  for  the  great  re- 
sponsibility than  to  propitiate  this  or  that  politician, 
or  this  or  that  special  interest  in  a  pivotal  state.  The 
will  of  the  people  would  be  carried  out  as  expressed, 
real  majorities  would  rule,  and  not  crude  apj)roxima- 
tions  thereto. 

The  practical  politician  is  an  egoist,  so  are  the  inter- 
ests which  he  serves.  He  manipulates  politics  for  gain, 
for  himself  and  for  his  masters.  His  effort  to  control 
a  political  situation  is  measured  by  the  probable  return. 
It  is  a  money  and  time  investment  for  a  money  return, 
what  we  call  "strictl}^  business."  The  politician  or  the 
agent  of  special  interest  supports  a  candidate  for  office 
with  the  understanding  that  there  shall  be  a  return  serv- 
ice. The  value  of  that  service  depends  largely  on  the 
length  of  the  term  for  which  the  officer  is  elected. 
Hence  a  practical  politician  will  invest  more  in  an 
officer  elected  for  two  years  than  for  one,  for  four 
years  than  for  two,  for  six  years  than  for  four,  and, 
in  general,  for  a  long  term  than  for  a  short.  Other 
things  being  equal,  the  amount  of  money  invested 
in  election  is  directly  proportional  to  the  term  of 
office  to  be  filled.  A  certain  policy  extending  over 
four  years  will  yield  greater  return  than  a  like  policy 
extending  over  half  that  time,  and  at  the  end  of  four 
years  there  is  a  better  chance  to  continue  that  policy 
than  there  is  at  the  end  of  two.  On  the  other  hand  the 
official  elected  for  a  long  term  is  more  independent  of 
the  citizen  electors  and  less  responsive  to  their  will. 
He  knows  that  the  money  power  is  with  him, as  wealth 


A  BREED  OF  BARREN  METAL  200 

always  dreads  change.  To  drive  money  out  of  politics 
and  secure  a  sure  and  prompt  response  to  popular  will, 
all  the  terms  of  all  important  officials  should  be  short- 
ened b}'  about  one-half.  No  more  should  be  paid  for 
Ihe  work  of  minor  officials  than  is  paid  for  the  same 
(dass  of  work  by  private  individuals.  There  would  then 
be  no  profit  in  manipulating  politics,  and  the  practical 
])olitician  is  not  the  sort  of  man  to  waste  time  and 
money  without  return. 

There  would  be  no  upsetting  of  business  by  frequent 
elections,  as  is  often  claimed.  The  very  opposite  would 
be  the  elfoct.  The  tenure  of  party  would  become  so 
uncertain  that  every  citizen  would  make  it  his  business 
to  seethat  the  candidates  of  all  parties  were  trustworthy. 
The  officers  who  would  really  represent  the  voter  would 
have  his  confidence.  Each  election  would  not  be  a  peri- 
odic contention  of  special  interests  causing  a  periodic 
crisis  of  suspense  in  business  interests.  Politics  and 
business  would  tind  it  necessary  and  profitable  to  go 
on  together. 

To  be  sure,  with  the  initiative  and  referendum,  mi- 
nority representation  and  other  like  reforms,  short 
terms  would  be  less  imperative,  but  as  a  means  of  avoid- 
ing the  use  of  miney  in  politics  and  preventing  peri- 
odic business  upheavals  while  awaiting  an  election 
crisis,  they  would  be  invaluable.  Anything  tending 
to  break  d(nvn  partisan  power  and  make  minorities  re- 
sponsible, would  be  a  boon.  The  minority  would  then  not 
seek  to  make  the  laws  of  the  majority  as  liad  as  pos- 
sible in  order  to  cause  a  revulsi(jn  of  feeling  and  a 
return  to  power   of  their  party 

.  This  is  in  the  nature  of  a  digression,  but  still  ger- 
mane to  the  principal  subject.  These  reforms  must  be 
made  sooner  or  later,  whether  we  nationalize  the  bank- 
ing system  or  no,  and  if  they  are  made,  the  only  valid 
objection  to  extending  tiie  powers  of  government:  would 
vanish.  W'here  tli(>  government  is  really  and  tiMily  the 
pe()[)Ie,  there  is  nothing  whi<di  the  people  wish  I'l  tlo 
that  th«;y  cannot  legitimately  do  without  violating  a 
singh;  |U'inf;iple  of  indiviflual  rights.  It  is  only  to 
governments  extraneous  to  the  peo[)]o  that    the  criti- 


210  A  BREED  OF  BABREN  METAL 

cism  of  the  danger  of  too  large  an    assumption  of  the 
power  of  the  government  holds  valid. 

To  return  to  our  principal  theme,  the  proposed  ware- 
house receipts  might  be  made  in  amounts  large  enough 
in  no  way  to  obstruct  sales  and  still  give  every  one  the 
advantage  of  the  accommodations  of  the  bank.  The 
warehouses  need  not  be  different  from  the  bonded 
warehouses  of  to-day;  the  duties  of  inspectors,  gaugers 
and  weighers  would  be  less  difficult  than  the  duties  of 
our  present  custom  and  revenue  officers. 

The  receipts,  as  stated,  might  be  issued  in  duplicate, 
so  that  the  bank  may  retain  the  original,  while  the  du- 
plicate could  be  made  negotiable,  thus  accelerating  sales. 
The  duplicate  should,  however,  be  made  simply  an  evi- 
dence of  ownership  of  the  original,  and  the  original 
alone  should  be  the  instrument  on  which  the  goods 
could  be   drawn. 

Security  other  than  the  goods  for  sale  would  be  re- 
quired of  each  patron  to  the  full  amount  of  his  bank 
credit,  to  secure  the  bank  against  possible  fraud  in 
weighing  or  insjDection  of  the  goods,  and  to  enforce  the 
requirement  that  the  goods  should  be  sold  by  their 
owner,-  thus  relieving  the  bank  of  all  unnecessary 
trouble  or  responsibility.  When  the  goods  were  sold 
the  credit  would  Ije  canceled  to  that  extent,  and  a  vol- 
ume of  money  corresponding  to  the  goods  sold  would 
be  withdrawn  from  circulation.  ■ 

Bonds  and  stocks  and  evidences  of  credit  may  very 
properly  be  taken  as  security,  but  no  money  should  be 
issued  on  them,  for  the  simple  reason  that  they  are  not 
wealth.  That  is  the  fatal  weakness  of  all  money  sys- 
tems so  far  devised.  The  volume  of  the  debts  of  the 
United  States  as  a  nation  has  no  necessary  relation  to 
the  current  business  of  the  country  and  hence  to  the 
volume  of  currency  required.  The  volume  of  public 
debt  or  even  private  securities  has  no  more  relation  to 
the  exchanges  of  the  country  than  they  have  to  the  nec- 
essary transportation  facilities.  A  money  founded  on 
them  is  entirely  without  a  criterion  as  to  volume.  It 
may  be  twice  too  large  in  amount  and  may  not  be  half 
large  enough,  And  besides,  a  money  founded  on  wealth 


A   BREED   OF    BARREN    METAL  211 

could  not  be  based  on  evidences  of  indebtedness.  It 
would  be  paper  founded  on  paper,  not  wealth  in  an}^ 
sense.  In  the  sale  of  a  railway  or  a  piece  of  real  estate, 
to  be  sure,  the  instrument  of  title  could  be  taken  as 
evidence  of  ownership,  and  be  treated  as  such. 

In  practice  it  would  not  be  found  difficult  to  make 
goods  in  transit  the  basis  of  bank  credit,  so  that  com- 
modities intended  for  a  distant  market  may  be  for- 
warded to  that  market  and  at  the  same  time  serve  as  the 
basis  of  a  money  or  credit  issue.  The  intimate  com- 
munication of  the  banks  with  one  another  and  the  ease 
with  which  the  carrier  may  be  made  to  serve  the  pur- 
pose of  the  bonded  warehouse,  would  make  such  credits 
especially  easy  to  arrange.  The  details  need  not  be 
given. 

Of  course  the  banking  system  would  not  be  a  money- 
making  concern,  and  a  small  percentage  on  business 
transacted  would  give  a  revenue  sufficient  to  pay  rents, 
clerk  hire,  and  cost  of  printing  books  and  notes. 

There  could  be  no  objection  to  making  deposits  of 
currency  the  basis  of  bank  credit. 

It  would  be  introducing  no  new  principle  to  give  the 
government  through  its  banks  full  control  of  the  issu- 
ing of  all  money,  and  the  making  of  what  it  chose  legal- 
tender.  The  so-called  precious  metals  must  cease  to 
exist  as  legal  money  before  any  reformed  currency 
would  be  perfectly  successful.  Otherwise  private  con- 
tracts wrung  by  the  controllers  of  gold  would  force  the 
currency  back  to  a  metallic  basis.  Of  course  gold  and 
silver,  like  other  wealth  on  the  market,  should  be 
allowed  to  become  the  basis  of  a  money  issue,  but 
merely  at  their  market  price. 

For  the  convenience  of  foreign  trade  as  well  as  for  its 
own  prcjtection,  the  government  would  continue  to 
weigh,  test  and  stamp  with  assay  mark,  gold  and  silver 
bullicjn.  This  would  make  the  bullion  as  readily  nego- 
tiable in  foreign  trade  as  our  ]iresent  coins. 

It  wr  uld  prolial)ly  be  necessary  at  first  to  giv(i  the  gov- 
ernnifnt  a  legal  mono])oly  of  the  banking,  as  it  has  of 
the  postoffice  business,  bul  this  necessity  would,  in  time, 
pass  away,  as  there  would  l)e  no  occu[)vtion  for  private 
bankers. 


CHAPTER  XXXI. 

Objections  Ansvvkred— Why  it  is  necessary  to  have  a  special  form  of  currency 
for  the  purpose  of  preventing  interest-taking — Prohibitive  statutes — Reasons 
wliy  they  are  so  often  ineffective— The  proposed  regulation  not  a  prohibitive 
statute  in  the  sense  that  other  usury  laws  are — Prohibitive  statutes  not  ahvays 
ineffective — The  testimony  of  Bentham-i-The  statute  of  Queen  Anne — Testi- 
mony as  to  effectiveness — The  sort  of  a  usury  law  whichwould  not  be  ineffec- 
tive— Specific  provisions — Has  the  state  a  right  to  regulate  contracts  between 
citizens? —It  is  done  every  day — Bentham— Hoarding  money — How  it  may  be 
prevented — Specific  provisions — Adam  Smith — All  interest  wrong — The  borrow- 
er's profit — Will  interest-taking  cease  of  itself?  — Is  interest  falling? — Is  risk 
the  basis  of  excessive  interest?— Observed  facts. 

Many  men  prefer  d(mhtin(]  to  under  stem  dimj. 

With  a  perfect  national  banking  system  sucli  as  pro- 
posed, commercial  loans  would  be  entirely  done  away 
with  and  but  little  interest,  comparatively  speaking, 
could  be  collected.  But  currency  is  generalized  wealth, 
or  rather  an  order  for  any  sort  of  wealth  on  demand, 
and  it  is  not  subject  to  the  universal  law  of  wealth,  the 
law  of  decay  and  final  destruction.  It  is  not  bulky, 
not  ditficult  to  protect.  Hence  where  the  demand  may 
be  made  at  any  time  for  an  unlimited  period,  and  the 
face  value  collected,  the  currency  would  be  more  ad- 
vantageous for  hoarding  than  any  form  of  wealth,  and 
the  receivers  of  surplus  incomes  would  withdraw  it 
from  circulation  and  hoard  it  for  future  use.  It  would 
represent  a  demand  not  made  and  hence  that  amount 
of  goods  would  remain  a  glut  on  the  market.  Demand 
and  supply  would  be  so  far  unbalanced.  The  hoarders 
of  currency  would  shift  the  burden  of  wealth  deteriora- 
tion on  some  one  else.  They  would  finally  hold  enough 
currency  to  derange  trade  somewhat  and  make  it  neces- 
sary for  others  to  borrow  at  interest,  even  in  commer- 
cial transactions.  They  would  lend  at  interest  to  new 
enterprises  It  is  to  obviate  this  that  I  suggest  the 
specific  laws  against  interest-taking. 

212 


A  BKEED  OF  BARREN  METAL  218 

It  has  become  fashionable  to  assert  that  prohibitive 
statutes  or  statutes  limiting  the  amount  of  interest  taken 
are  not  only  ineffective  but  mischievous.  Even  if  this 
were  true  it  would  have  nothing  to  do  with  the  pro- 
])osed  prohibitive  statute.  The  trouble  with  usury  laws 
so  far,  is  that  they  have  been  mere  acts  of  expediency 
founded  on  no  principle  whatever.  No  moral  turpitude 
attaches  to  the  taking  of  interest  to  any  amount.  If  it 
is  not  wrong  to  take  six  per  cent  interest  when  one  can 
get  that  much  and  no  more,  it  cannot  be  very  wrong  to 
take  ten  per  cent  interest  when  one  can  get  that  amount. 
If  taking  ten  per  cent  interest  is  not  wrong  in  California 
it  is  not  wrong  in  New  York.  The  laws  recognize  in- 
terest-taking as  right  and  fix  a  sort  of  barrier  lest  too 
much  right  should  make  a  wrong.  It  would  be  as  sen- 
sible to  regulate  the  amount  of  beating  which  one 
citizen  might  give  another  without  making  himself 
amenable  to  the  law. 

Again  the  legislators  who  pass  these  laws,  the  law- 
yers who  draft  them  and  the  judges  who  are  called  upon 
to  enforce  them,  believe  in  the  divine  right  of  every 
one  to  take  all  of  another's  goods  that  he  can  get,  and 
evade  the  law.  In  short,  the  laws  are  wrong  in  concep- 
tion, inadequate  in  provision,  and  untrustworthy  in 
enforcement. 

Yet  with  all  of  their  imperfections,  these  laws,  when 
lionestly  administered  with  the  intention  of  suppress- 
ing what  was  thought  to  be  excessive  interest,  had  a 
very  marked  effect.  The  Queen  Anne  statute  of  usury 
was  rarely  evaded,  and  succeeded  in  cutting  down  the 
ordinary  rate  of  interest  to  five  per  cent.  It  was  repealed 
on  sentimental  principles  of  what  was  posited  as  free- 
dom of  contract  rather  than  from  any  inefficiency  or 
hard>lii[)  due  to  the  law  itself;  and  its  r(^])(\-il  worked  a 
hardsliii)  on  all  excejit  those  with  the  very  best  credit. 
Of  this  law  Lord  Mansfield  said, "Where  the  real  truth 
is  a  loan  of  inoncy,  ihf  wit  of  nuin  cannot  find  shift  to 
evade*  the  statute"  In  controverting  the  opinion  of 
Dr.  Smith,  that  no  law  (;an  r(Mluc(!  th(;  rate  (jf  intmv^st 
behnv  the  ordinary  market  rate,  Mr.  Jientham  in  his 
"Defense  of  Usury"  says:  "As  to  the  general  proposi- 


214  A  BREED  OF  BARREN  METAL 

tion,  if  SO  it  be,  so  much,  according  to  me,  the  better, 
but  I  must  confess  I  do  not  see  why  this  should  be  the 
case.  The  evasion  of  the  French  law  might  be  due  to 
a  defect  in  penning  that  particular  law,  or  in  the  pro- 
visions made  for  carrying  it  into  execution.  In  either 
case  it  affords  no  support  to  the  general  proposition. 
For  the  position  to  be  true  the  case  must  be  that  every 
law  would  still  be  broken,  even  after  every  means  of 
what  can  properly  be  called  evasion  has  been  removed. 
For  destroying  the  law's  efficacy  altogether,  I  know 
of  nothing  that  could  serve,  but  a  resolution  on  the 
part  of  all  persons  any  way  privy,  not  to  inform.  In 
England,  as  far  as  I  can  trust  my  judgment  and  the 
general  recollection  of  the  import  of  the  laws  relative 
to  this  matter,  I  should  not  suppose  that  the  above 
proposition  would  prove  true." 

As  a  matter  of  fact,  Bentham  was  right.  Real  estate 
mortgage  loans  never,  while  the  statute  was  in  opera- 
tion, drew  more  than  five  per  cent  interest,  while  it 
was  proved  before  the  committee  of  the  Commons  who 
investigated  the  matter  in  1818  and  the  committee  of 
the  Lords  who  investigated  it  in  1841  that  the  market 
rate  of  interest  had  frequently  been  more  than  five  per 
cent  during  that  period.  Never  did  bond  or  note  for 
the  century  and  a  quarter  during  which  that  law  held 
sway,  bear  more  than  five  per  cent  interest.  Mr.  Byles, 
in  his  work  on  usury,  quotes  Mr.  Gurney,  an  eminent 
English  bill  broker  of  the  time,  as  saying:  "I  consider 
the  evasion  of  the  usury  laws  to  be  partial.  I  am  of 
the  opinion  that  the  lender  of  money  was  ol^liged  to  be 
satisfied  with  five  per  cent  and  that  the  borrower  has 
got  it  at  a  more  reasonable  rate  in  consequence  of  the 
law."  The  same  autlior  quotes  Mr.  Kempble,  an  exten- 
sive produce  broker,  in  business  for  more  than  thirty 
years,as  saying,  "I  am  not  awareof  any  practice  among 
merchants  to  avoid  the  usury  laws,  or  attempt  to  avoid 
them."  The  testimony  of  Mr.  Gibbs,  the  great  annuity 
dealer,  is  in  the  same  line,  and  is  corroborated  strongly 
by  Mr.  Maynard. 

I  cannot  go  into  the  history  of  legislation  against 
usury  at  length,  but  I  have  quoted  far  enough  to  show 


A  BREED  OF  BARREN  METAL  215 

that  where  laws  against  excessive  interest  were  made 
to  be  enforced,  and  the  people  concerned  wanted  them 
enforced,  they  were  enforced,  at  least  as  thoroughly  as 
any  other  law.  We  would  not  think  of  repealing  laws 
against  stealing  or  fraud  because  such  things  are  still 
practiced,  yet  if  the  argument  of  ineffectiveness  is  good 
in  one  case  it  is  in  the  other. 

Make  a  usury  law  founded  on  the  theory  that  interest- 
taking  is  wrong  in  itself — a  crime.  Draw  it  so  that  it 
will  be  difficult  to  evade,  and  support  it  with  a  public 
sentiment  as  strong  as  that  against  stealing,  and  we 
would  have  no  trouble  in  having  the  law  enforced. 
That  is  what  I  propose.  There  are  people  who  have 
such  a  mistaken  idea  of  honor  that  they  will  refuse  to 
bring  to  justice  the  sharper  who  robs  them.  There  are 
others  who  would  suffer  rather  than  have  it  known  that 
they  are  dealing  with  usurers,  but  these  are  a  small 
percentage.  If  half  of  the  forfeited  debts  should  go  to 
the  informer  and  half  to  the  state,  self-interest  would 
largely  provide  for  the  enforcement  of  the  law  against 
those  who  loaned  surreptitiously. 

.  The  provision  making  loans  between  private  parties 
uncollectible  unless  made  through  the  government 
bank  would  make  the  evasion  of  the  law  by  sul)terfuges 
entirely  impossible.  The  bank  officers  would  deliver 
the  instruments  of  security  to  one  and  the  money  to 
the  other,  and  could  easily  see  that  there  were  no  de- 
ductions. This  is  no  more  than  we  now  compel  in  the 
transfer  of  real  estate.  It  has  to  be  done  in  a  certain 
fixed  way  to  make  it  valid.  A  watch  over  the  contract 
of  loan  is  just  as  important. 

Here  again  we  meet  with  the  objection  of  Bentham 
and  others  tiiat  the  state  has  no  right  to  interfere  in  con- 
tracts between  individuals  and  that  ils  interference 
always  w<jrks  evil.  Oiif  goverinnent  is  constituted 
largely  for  the  purpose  of  protecting  tln'  weak  from  the 
aggressi(jn  and  wrtjng  of  the  stronger,  and  anything 
which  will  do  this  is  certainly  within  the  i>ro\'ince  of 
government.  Our  sanitary  laws,  our  coinage  laws,  our 
laws  against  adulteration  o!'  foods,  our  statutes  against 
fraud,  our    statutes   against  gambling,  our   regulation 


216  A  BREED  OF  BARREN  METAL 

of  rates  for  carriers,  and  thousands  of  other  laws  are 
made  to  interfere  in  individual  contracts  in  behalf  of 
the  less  wise,  less  cunning,  or  the  weaker  party.  If 
government  is  not  going  to  give  greater  security  to 
citizens  in  their  rights,  then  government  has  no  excuse 
for  being.  And  so  far  as  being  an  interference  with 
individual  rights,  it  is  no  more  an  interference  with 
the  rights  of  citizens  to  jirevent  them  being  defrauded 
by  usury  than  it  is  to  prevent  them  from  being  robbed 
by  force.  On  the  other  hand,  no  one  has  a  right  to 
wrong  another.  And  in  a  government  of  the  people, 
who  is  the  judge?  Who  is  to  set  limits  as  to  what  the 
people  choose  to  do  in  their  corporate  rather  than  in 
their  individual  capacity?  Certainly  no  one  but  the 
people  themselves.  If  they  think  their  interest  can  be 
better  protected  by  preventing  one  man  from  taking 
advantage  of  another,  they  have  certainly  the  right  thus 
to  protect  them.  No  man  has  a  right  to  become  the 
object  of  a  wrong,  and  it  is  absurd  to  say  that  you  in- 
vade one's  rights  when  you  protect  him  from  wrong. 
And  the  law  could  not  even  he  passed  without  the  sup- 
port of  popular  sentiment.  Anything  which  will  better" 
the  relations  of  man  to  man  is  the  province  of  govern- 
ment. 

It  is  scarcely  necessary  to  go  further  in  answering 
the  apologists  for  usury.  Bastiat  is  the  only  one  who 
has  gone  at  all  into  the  philosophy  of  the  subject*  He 
has  been  effectually  disposed  of.  Bentham  goes  no 
further  than  to  show  the  inconsistency  of  the  average 
laws  against  usury.  He  says  that  as  the  percentage  of 
interest  charged  must  depend  upon  circumstances, 
where  it  is  right  under  one  set  of  circumstances  to 
charge  five  per  cent  it  is  equally  just  under  other 
circumstances  to  charge  ten.  Where  we  make  an  in- 
flexible rule  we  work  injustice.  If  six  per  cent  is  not 
wrong,  ten  per  cent  can  not  be  very  wrong.  Such  ar- 
gument has  no  force  with  one  who  denies  the  right  of 
any  borrower  to  take  any  interest  whatever  and  consid- 
ers one  per  cent  or  ten  an  unwarranted  extortion  and 
moral  wrong. 

Bentham  thinks  that  laws  against  usury  are  further 


A  BREED  OF  BARREN  METAL  217 

inconsistent  in  preventing  interest  on  money  and  allow- 
ing hire  for  the  use  of  all  other  sorts  of  wealth — rents 
for  houses,  etc.  There  is  truth  in  that  position.  It  is 
inconsistent,  but  the  proposed  scheme  does  not  embrace 
that  inconsistency.  It  denies  the  right  to  take  increase 
for  any  sort  of  wealth,  '^for  anything  that  is  lent  upon 
usury." 

Then  Bentham  says  that  a  certain  class  of  borro\yers 
in  desperate  circumstances  will,  under  laws  against 
usury,  be  obliged  to  go  to  the  wall  at  once  and  not  be 
able  to  prolong  their  business  career  until  the  usurer 
has  all  of  their  property  and  the  rest  of  their  creditors 
are  left  without  recourse.  This  is  the  real  substance 
of  his  argument  about  the  impossibility  of  persons  bor- 
rowing with  little  or  no  security.  There  is  no  hardship 
in  that.  Without  usury  laws  such  persons  will  be 
charged  rates  which  no  business  can  stand  longer  than 
a  few  months,and  their  property  will  go  to  the  money- 
lender. It  would  be  better  for  all  concerned  if  they 
could  not  borrow  at  all.  Then  their  property  would 
be  saved  for  their  legitimate  creditors.  Under  thn 
proposed  system,  no  one  with  security  to  give  need  want 
for  money. 

If  money  may  be  hoarded  with  impunity  it  will  be 
hoarded,  for  reasons  given  ab(jve.  The  only  way  to 
prevent  such  an  outcome  is  to  nuike  a  currency  the  hold- 
ing of  which  is  no  more  profitable  than  the  wealth 
which  it  represents.  Nothing  hut  a  time-limit  currency 
could  be  made  to  deteriorate  with  holding  beyond  a  cer- 
tain limit  without  impairing  the  use  of  that  currency  as 
a  circulating  medium.  With  a  time-limit  currency,thn 
whole  volume  issued  during  a  corresponding  period  must 
go  back  to  the  bank  of  issue  before  the  time-limit  ex- 
pires. Those  who  simj^ly  used  their  money  for  hoard- 
ing could  then  be  taxed  an  amount  sufhcient  to  make 
up  for  the  deterioration  of  the  wealth  represented  by 
the  money  they  held.  They  would  then  use  their  cur- 
rency or  lend  it  without  interest,  and  save  the  amount 
of  the  deterioration  tax. 

It  would  he  entirely  feasible  to  stamp  notes  with  thr* 
date  of  expiration  so  that  any  one  able  to  read  currency 


218  A  BREED  OF  BARKEN  METAL 

ooiild  tell  the  date.  The  money  obtained  in  the  regular 
course  of  business  by  persons  holding  bank  credit  on 
goods  would  be  redeemed  as  a  matter  of  course  in  the 
currency  of  current  issue.  The  currency  should  be 
legal-tender  for  debts  up  to  the  time  of  its  becoming 
non-current  and  hence  it  could  not  be  discriminated 
against.  The  low  limit  which  would  be  set  to  the 
amount  redeemable  free  of  charge  for  any  one  person, 
coupled  with  the  requirement  that  all  currency  pre- 
sented for  redemption  should  be  left  at  the  bank  until 
the  period  of  redemption  had  expired,  would  make  it 
impossible  for  the  holders  of  large  amounts  of  currency 
for  hoarding,  to  have  their  holdings  redeemed  piece- 
meal. On  the  other  hand,  it  would  relieve  from  loss 
wage-earners  and  small  shop-keepers  who  did  not  carry 
bank  credit  and  received  the  currency  in  the  course  of 
business,  and  thus  prevent  the  currency  from  being 
discriminated  against  in  trade  as  well  as  in  paying  fixed 
debts.  Experience  would  teach  the  proper  limit  for 
the  free  redemption  of  currency.  It  may  be  fifty  and 
it  may  be  two  hundred  dollars.  In  practice  nearly  the 
whole  of  any  issue  would  be  taken  up  before  it  became 
non-current. 

This  provision  is,  of  course,  for  the  purpose  of  pre- 
venting any  one  from  hoarding  currency,  and"  compel- 
ling the  holders  of  surplus  to  lend  it  without  interest. 

A  charge  of  percentage  on  deposits  would  l)e  for  the 
same  purpose.  It  would  make  the  holding  of  currency 
as  expensive  as  the  holding  of  real  wealth.  Where  one 
held  wealth  as  the  basis  of  his  bank  deposits  or  credit, 
it  would  be  manifestly  unjust  to  charge  him  a  percent- 
age on  his  credit  as  well  as  compel  him  to  take  care  of 
his  wealth.  This  provision  would  place  the  holders  of 
money  on  the  same  footing  as  the  holders  of  wealth, 
nothing  more. 

After  the  days  for  redemption  at  par  had  expired, 
then  the  non-current  notes  hoarded  would  gradually 
lose  their  value, just  as  the  corresponding  wealth  would 
deteriorate  until  they  would  become  worthless  in  time, 
just  as  wealth  does  by  holding  out  of  use. 

Adam  Smith  did  not  go  into  the  philosophy  of  inter- 


A  BREED  OF  BARREN  METAL  219 

est-taking.  He  seemed  to  think  that  competition  be- 
tween lenders  would  be  sufficient  in  older  countries  to 
keep  down  the  rates  of  interest  to  a  reasonable  figure. 
He  seemed  to  forget  that  most  of  the  competition  is  on 
the  other  side,  among  the  borrowers,  and  that  the  rule 
among  bankers  and  financiers  generally''  is  close  and 
effective  combination.  His  arguments  against  limiting 
contracts  are  the  stock  article  already  noticed. 

But  even  if  interest  were  lowered  to  the  legal  rate  of 
most  countries  it  must  still  be  an  extortion.  If  wealth 
does  not  make  wealth,  as  I  believe  I  have  proved  it 
does  not,  then  the  taking  of  any  increase  is  unreasona- 
ble, and  we  have  never  come  to  the  point  where  money 
was  loaned  for  nothing.  But  say  Smith  and  many 
others,  the  borrower  makes  a  profit  on  this  l)orrowed 
wealth,  even  after  paying  interest.  So  much  the  worse. 
Where  does  his  profit,  including  the  interest,  come 
from?  The  wealth  used  to  pay  a  profit  did  not  make 
itself,  it  must  have  been  earned  by  some  one.  If  not 
l)y  the  borrower,  then  by  some  one  <^lseto  wliom  it  would 
rightfully  belong.  The  very  term  "profit"  implies  unjust 
advantage.  It  is  gratuitous  gain  for  which  nu  return 
is  given.  Before  we  reckon  net  profits  we  deduct  all 
legitimate  expenses  and  then  we  have  left  a  shave,  an 
advantage  wrung  l)y  the  cunning  of  some  one  from  the 
labor  of  another.  All  profit  is  really  interest,  but  as  it 
cannot  be  attacked  directly  we  must  try  to  reach  it 
through  the  medium  of  interest  on  money  loans.  The 
currency  system  is  the  key. 

It  is  very  generally  but  very  gratuitously  asserted 
that  we  shall  finally  reach  a  point  where  abundance  of 
capital  will  make  interest  merely  nominal.  Let  us  see. 
According  in  the  Old  Testament,  usury  taken  by  usu- 
rers among  the  tribfts  of  L'^raol  often  am(ninted  to  not 
m(jre  than  one  p(;r  cent.  \\'<'  have  no  record  of  interest 
being  so  low  afterward. 

Interest  in  Rome  during  the  empire  was  down  to  four 
per  cent.     The  average  interest  in  America  to-day  on 
perfect  security  for  UKxlerate  ])eriods    is  six  and   one- 
half  pfr  cent.      Slow  progress  this  toward   no  interest- 
There  are  instances  of  interest  being  so  low  as  three 


220  A  BREED  OF  BARREN  METAL 

per  cent  in  England  one  hundred  and  fifty  years  ago. 
It  was  even  lower  in  Holland  before  that  time.  At  the 
time  of  the  passage  of  the  Queen  Anne  usury  statute, 
five  per  cent  was  considered  the  largest  amount  which 
should  be  taken  in  interest.  In  not  one  of  these  coun- 
tries can  cheaper  loans  Ije  had  to-day  except  on  very  long 
time.  Government  loans  are  exceptional.  They  carry 
with  them  a  sort  of  assurance  that  in  rapidly  changing 
conditions  the  man  of  wealth  will  not  l)e  disturbed  for 
at  least  a  long  period.  Where  one  is  so  enormously 
wealthy  that  a  small  percentage  will  give  him  an  all- 
sufficient  income  without  any  trouble  whatever,  he  nat- 
urally prefers  such  an  investment  to  a  better  paying 
one  without  the  assurance  and  with  the  element  of 
personal  exertion.  Then,  government  bonds  not  being 
subject  to  taxation,  the  net  interest  charge  on  money 
loaned  on  them  is  not  so  very  different  from  that  loaned 
on  other  property. 

We  are  constantly  told  that  interest  in  this  country 
is  gradually  falling.  As  a  matter  of  fact,  it  has  increased 
pretty  steadily  since  1880,  if  not  since  1873.  Accord- 
ing to  the  mortgage  researches  of  Carrol  D.  Wright, 
the  nominal  interest  on  farm,  loans  has  decreased  one- 
tenth  of  one  per  cent  since  1880.  The  nominal  inter- 
est on  lot  mortgage  loans  has  decreased  a  little  more 
than  three-tenths  of  one  per  cent  in  the  same  period. 
According  to  the  calculations  of  experts,  gold  has  in- 
creased in  value  between  fifteen  and-  twenty  per  cent 
during  that  time.  At  the  lower  figure  the  real  interest 
charged  for  farm  and  lot  mortgage  loans  in  1890  would 
exceed  the  real  interest  paid  on  such  loans  in  1880  by 
about  one  per  cent.  For  all  interest  is  contracted  for 
and  paid  on  a  gold  basis.  This  will  put  the  average  in- 
terest on  land  mortgage  loans  up  to  eight  and  one-half 
l^er  cent,  a  formidable  figure.* 

If  we  apply  the  same  test  to  government  loans,  we 
shall  find  that  our  advantage  is  not  nearly  so  marked 

*As  the  average  period  of  a  loan  is  about  five  years  instead  of  twenty,  the 
actual  increase  of  real  interest  rate  due  to  the  appreciation  of  gold  is  but  one- 
fourth  that  given  in  the  text,  but  tliis  is  sufficient  to  more  than  counteract  ap- 
parent reduction  inrate.  Besides,  when  the  principal  comes  to  be  paid,  from 
one  and  one-half  to  two  per  cent  per  year  is  added  by  reason  of  money-unil  ap- 
preciation. 


A  BREED  OF  BARREN  METAL  221 

as  one  might  imagine.  Economist  MeCulloch  says,  in 
a  note  to  Adam  Smith's  "Wealth  of  Nations, "that  it  is 
doubtful  if  a  lower  rate  of  real  interest  is  paid  in  Eng- 
land to-day  than  was  in  barbarous  times.  The  same  is 
true  everywhere  as  a  general  proposition.  There  are  so 
many  laborers  on  the  vergeof  starvation  and  their  com- 
petition for  the  use  of  wealth  so  fierce  that  it  is  impos- 
sil)le,  under  present  conditions,  to  have  interest 
materially  fall. 

Others,  again,  learnedly  divide  interest  into  risk-pre- 
mium or  insurance  and  interest  proper  and  maintain 
that  while  interest  proper  is  everywhere,  in  this  coun- 
try, practically  the  same,  that  risk-premiunr  gets  the 
rates  distorted  entirely  out  of  proportion.  It  is  a  very 
good  explanation  except  that  it  is  contrary  to  facts. 
As  regards  a  certainty  of  having  the  iuoney  of  the  bor- 
rower refunded,  real  estate  mortgages  are  the  most  per- 
fect sort  of  private  security  in  general  use.  Real  estate 
is  not  mortgaged  for  more  than  one-third  to  one-half  of 
its  market  value;  in  fact  the  figures  of  the  government 
bureau  of  statistics  put  the  percentage  much  lower. 
The  entire  cost  of  making  the  loan  is  borne  l)y  the  bor- 
rower, including  all  brokerage  and  commissions.  Where, 
in  the  name  of  common  sense,  is  the  risk?  Yet  when 
money  could  be  had  by  the  government  and  some  fa- 
vored corporations  for  three  and  one-half  per  cent,  six 
to  nine  per  cent  was  being  charged  on  fntu'tgage  loans. 
In  modern  transactions  of  the  more  legitimate  sort, 
risk  has  nothing  to  do  with  the  rate  of  interest.  The 
security  is  believed  to  be  perfect  and  is  perfect  usually 
before  the  loan  is  made,  except  in  the  case  of  five  per 
cent  a  month  sharks  entirely  beyond  consideration. 
And  even  these  seldom  lose 

There  are  two  or  three  reasons  why  interest  rates 
vary.  Our  financial  system  and  financial  polic)'^  tend 
to  mass  all  Hurjilus  wealth  in  a  very  few  commercial 
centers  of  the  East,  Here  it  is  remote  from  a  mass  of 
borrowers  on  mortgage  security,  its  possessors  know 
nothing  of  and  cari'  less  for  the  condition  of  the  usurs 
of  tlu;  surplus  and  alh»w  thnir  wealth  to  snck  more  or 
less  renioti-  marl\i'l<  onlv  on  thi'  condition   of  oIVits    oI 


222  A  BREED  OF  BARREN  METAL 

large  gain.  For  the  mass  of  borrowers  there  is  abso- 
lutely no  competition  among  lenders.  They  cannot 
afford  to  go  into. the  money  markets  of  the  East  and 
bid,  and  are  at  the  mercy  of  an  agent  who  dictates  rates. 
On  the  other  hand,  the  United  States  government  can 
go  into  the  markets  of  the  world  and  receive  the  benefit 
of  world-wide  competition.  The  same  is  true  in  a  less 
degree  of  all  large  organizations. 

Again,  the  extremely  long  time  which  government 
and  like  loans  run,  give  them  a  permanence  which  is 
everything  with  the  great  ease-loving  capitalist.  He  is 
sure  of  a  certain  amount  for  a  large  portion  of  his  life- 
time, while,  if  he  had  to  renew  ever}^  five  years,  who 
knows  what  changes  might  take  place  in  the  meantime? 
Then  at  present  government  bonds  are  so  convenient  as 
a  basis  for  money-making  banking  enterprises,  and  are 
exempt  from  taxation. 

Any  observer  may  verify  these  statements  for  him- 
self. During  the  financial  stringency  of  1893  a  loan 
was  sought  on  a  piece  of  land  inside  of  Fourteenth 
Street  and  between  Mill  Creek  Valley  and  Olive  Street 
in  the  city  of  St.  Louis.  As  is  Avell  known  by  all  ac- 
quainted with  the  city,  and  as  may  be  verified  by  any 
one  with  access  to  a  St.  Louis  map,  this  land  was  but 
just  outside  the  most  active  business  portion  of  the  city 
and  there  was  .no  possibility  of  its  deterioration  in 
value.  It  was  worth  then,  would  sell  at  auction  for, 
twice  the  value  of  the  loan  asked.  Yet  the  loan  was 
refused  at  eight  per  cent  Call  loans  were  made  in 
New  York  that  week  at  a  figure  scarcely  above  the  aver- 
age. Was  it  the  risk  in  the  premises  which  put  up 
the  rate  of  the  St.  Louis  loan?  Not  at  all.  It  was  the 
manipulation  of  the  money  market,  and  the  massing  of 
the  bulk  of  circulation  away  from  the  localities  where 
it  was  needed.  This  is  a  typical,  not  an  isolated  case, 
and  the  city  named  was  probably  less  distressed  in  that 
way  than  any  other  city  in  America  during  the  recent 
panic.  The  risk  explanation  has  not  a  leg  to  stand 
on.  It  is  a  mere  trick  of  usurious  ingenuity,  unthink- 
ingly adopted  by  economic  writers.  It  might  have 
some  force  at  times  of  governmental   insecurity  or   in 


A  BREED  OF  BARREN  METAL  223 

early  periods  of  violence.  It  certainly  has  not  at  pres- 
ent. The  man  who  loans  at  ten  per  cent  on  the  Minne- 
sota farm  is  as  sure  of  the  return  of  his  capital  and 
interest  as  the  man  who  invests  in  government  bonds 
at  three  per  cent. 


CHAPTER  XXXII. 

Interest-Taking  and  Wage-Earners — The  conclusion — But  one  way  of  in- 
creasing wages —  Must  strike  at  unearned  incomes — These  must  be  reached 
through  interest-taking — Capital  profits  unearned— Something  for  nothing — 
The  laborer  and  Malthus. 

If  Reginald  gets  something  for  nothing,  Jonathan  must 
give  something  for  nothing. 

To  the  reader  who  has  followed  me  througli  these 
pages,  it  is  by  this  time  clear  that  interest-taking  is 
wrong  in  itself.  It  is  also  clear  that  interest-taking  is 
at  the  bottom  of  much  of  the  industrial  wrong  and  fail- 
ure experienced  in  the  world.  I  have  pointed  out  a 
means  of  avoiding  that  wrong.  The  only  help  for  the 
oppressed  industrial  workers  is  to  adopt  this  or  some 
equally  effective  means  of  destroying  interest-taking 
and  placing  the  world  on  a  just  and  sound  industrial 
basis. 

We  have  seen  that  with  the  present  effectiveness  of 
machinery,  there  is  but  a  limited  product  to  distribute 
l:)etween  the  toiler, landlord,  and  the  capitalist.  If  the 
toiler  would  get  more  the  others  m.ust  get  less.  The 
others  do  not  earn  what  they  get.  The  laborer  has 
earned  a  right  to  all  that  is  left  of  the  gross  product 
after  keeping  up  capital.  If  he  would  increase  his  wages 
he  must  take  what  he  is  entitled  to.  There  is  no  magic 
l)y  which  larger  wages,  as  well  as  larger  profits,  can  be 
paid  out  of  a  fixed  product,  or  a  product  increasing 
only  in  proportion  to  the  march  of  civilization  and 
population.  The  laborer  must  realize  tiiis  and  strike 
at  the  root.  All  unearned  incomes  are  founded  on  rent 
and  interest-taking.  Any  unearned  income  makes  the 
wages  of  the  laborer  less,  for  it  is  getting  something  for 
nothing.  It  is  at  unearned  incomes,  then,  that  the  la^ 
borer  must  strike  and  the  place  to  strike  at   them  is  at 

224 


A    BREED    OF    BARREN    METAL  225 

their  foundation.  He  must  destroy  rent  and  interest- 
taking  by  private  individuals  if  he  would  better  his  own 
condition.  As  for  earned  incomes,  they  can  never  be 
a  harm  to  any  one  who  earns  what  he  gets,  for  they  im- 
ply that  the  receiver  gives  full  value  in  return.  There 
are  no  incomes  earned  by  wealth.  All  that  is  earned 
must  be  earned  by  human  labor  of  hand  or  brain.  The 
cutting  otf  of  all  incomes  from  other  sources  must  take 
place  before  those  who  labor  will  get  all  that  they  pro- 
duce, and  this  can  be  done  only  through  the  destruction 
of  interest-taking. 

In  a  just  industrial  organization  there  can  be  no  such 
thing  as  capital  profits.  Profits  mean  something  for 
nothing.  They  mean  that  after  one  is  paid  for  all  out- 
lay and  all  services,  he  is  paid  something  extra,  for 
nothing,  a  sort  of  bonus,  an  advantage  over  those  with 
whom  he  is  dealing.  It  would  be  impossible  that  all 
should  have  such  an  advantage.  One  must  get  the  ad- 
vantage from  those  with  whom  he  deals,  and  if  he  gets 
sometliing  for  nothing,  some  one  else  must  give  up 
something  for  nothing.  A  rule  of  economics  which 
cannot  be  generally  applied  is  defective.  A  rule  which 
posits  gain  for  one  at  the  expense  of  others,  is  unjust. 
The  laborer,  from  the  nature  of  things,  gets  no  profit. 
He  gets  liut  his  hire,  just  what  he  works  for,  and  that 
is  Init  a  p(jrtion  of  what  his  labor  produces.  He  never 
can  get  profits,  for  he  will  never  be  given  more  than 
his  laljor  produces.  Non-laborers  are  capitalists  or 
landlords,  and  it  is  they  who  must  get  the  profits. 
The  laborer  produces  all  wealth,  for  wealth  does  not 
make  itself,  and  hence  must  pay  to  the  landlord  and 
capitalist  their  prcjfits.  Profits  are  founded  on  interest- 
taking.  They  are  founded  on  the  assumi)tion  that 
wealtli  is  in  itself  ]n-(Kluctive,  and  for  that  reason  goes 
to  the  j)ossessors  (jf  wealth  alone.  They  can  Ije  de- 
stroyed only  by  destrijying  interest-taking  and  making 
nil  ))erHons  workers.  Present  laborers  must  have  hnl]) 
to  l)ear  their  burdens. 

This  is  the  salvation  of  the  lal)orer.  It  is  the  task 
which  he  must  ])ert'orrn  if  he  would  save  his  industrial, 
and     linally   iiis   politiciil    iiidcpcndi'iirc.      Strikes   are 


226  A  BREED  OF  BARREN  xMETAL 

as  extravagant  as  foolish.  Let  him  learn  just  what  he 
wants.  Let  him  then  make  a  specific  programme  and 
insist  at  the  polls  that  it  be  carried  out.  After  the 
political  changes  which  I  have  suggested,  the  govern- 
ment will  be  his.  Let  him  use  it.  It  is  his  only  hope. 
Concentrate  on  one  principle  at  a  time.  Let  every  one 
who  labors  support  it,  and  the  laborer  will  soon  have 
his  rights. 

It  is  said  that  well-fed  laborers,  according  to  the 
Malthusian  doctrine,  will  increase  so  fast  that  their 
progeny  will  soon  overrun  the  earth  and  the  over-crowd- 
ing will  make  them  as  poor  as  ever-— -that  population 
will  always  outrun  subsistence.  That  is  a  doctrine  full 
of  unction  to  the  top  dog,  the  apologist  for  the  system 
that  exists,  but  it  is  contrary  to  experience.  Observed 
facts  teach  us  that  with  the  human  family,  the  best 
fed,  most  prosperous  and  intelligent,  increase  more 
slowly,  and  the  best  check  to  population  is  to  make  the 
whole  race  prosperous  and  intelligent.  It  is  needless 
to  cite  instances.  It  is  a  matter  of  common  observa- 
tion. Let  the  toiler  destroy  interest-taking  and  organ- 
ize industry  on  a  just  basis,  and  he  can  afford  to  be 
indifferent  to  consequences.  Right  never  produces 
wrong. 


CHAPTER  XXXIII. 

A  Feasible  Currency  System — Some  of  its  advantages — A  destroyer  of  usury- 
Vested  interests — Our  reform  friends— The  single-tax— Its  theory  and  practice 
^The  dilemma  of  the  assessor — Exchange  value  of  land — Land  reform  not  a 
panacea — The  single-tax  theory  from  a  philosophical  standpoint — Land  and 
minerals— The  postal  savings  bank. 

There  is  room  for  him  and  for  me. 

Here,  then,  is  outlined  a  thoroughly  scientific  and 
feasible  currency  system.  A  system  which  will  respond 
to  supply  and  demand  as  readily  as  the  mercury  in  the 
thermometer  does  to  changes  in  temperature.  A  cur- 
rency which  will  be  perfectly  stable  as  to  unit  of  value, 
which  cannot  contract  so  as  to  produce  scarcity,  which 
cannot  expand  so  as  to  produce  over-supply.  There 
are  no  untried  principles  introduced.  The  proposed 
currency  is  founded  on  value,  and  the  volume  is  regu- 
lated by  business  needs.  It  will  be  neither  for  gold-bug 
nor  silver-bug  nor  paper-bug.  It  will  be  a  scien- 
tific currency,  recognizing  the  fact  that  we  have  gone 
beyond  the  stage  of  barter  and  can  stamp  orders  for 
wealth  on  articles  of  no  intrinsic  value. 

It  may  be  put  into  effect  immediately  with  less  ex- 
pense and  less  friction  than  would  be  encountered 
in  changing  tarilV  or  revenue  laws.  The  value  of  the 
precious  metals  which  it  would  take  from  sequestration 
would  bear  the  expense  of  the  new  system  twice  over. 
Banks  could  be  allowed  to  close  up  their  business  grad- 
ually and  there  need  be  no  panic  except  of  their  own 
making,  which  would  recoil  on  their  own  heads. 

We  would  be  relieved  of  the  incubus  of  gold-worship 
and  our  civilization  and  pros])erity  would  be  allowed 
to  expand  beyond  the  gilded  fetters  which  at  present 
bind  them.  The  system  could  be  put  in  perfect  work- 
ing order  within  a  year.     Within  five  years  the  country 

227 


228  A  BREED  OF  BARREN  METAL 

would  have  adapted  itself  to  the  new  conditions  ai\d  all 
would  be  peace  and  prosperity. 

Better  than  all  this,  usury  would  be  dealt  its  death- 
blow. Each  man  would  have  what  he  earned,  no  more. 
The  laborer  would  have  the  share  which  now  goes  to 
the  usurer  and  ere  long  would  add  to  that  the  share 
which  goes  to  the  landlord.  All  jnankind  would  bn 
toilers  with  common  rights,  common  interests  and 
common  sympathies.  Prevent  the  tiger  from  preying 
and  he  will  become  as  docile  as  a  kitten.  Give  both 
security  and  the  lion  and  the  lamb  will  lie  down  to- 
gether. It  will  not  make  a  paradise.  The  lovers  of 
power  at  the  expense  of  fellow-beings,  the  men  who 
conqueror-like  mount  the  ramparts  of  fame  on  the  life- 
less bodies  of  their  fallen  kinsmen,  will  want  none  of 
it.  For  the  man  who  gives  a  return  f(jr  what  he  gets  it 
is  a  start  toward  a  nobler  goal  than  he  has  ever  yet 
aimed  for. 

Vested  interests  will  be  proclaimed.  It  would  be  a 
contradiction  of  terms  to  say  that  one  had  a  right  to 
wrong  a  fellow-man.  Yet  this  is  what  vested  interests 
imply.  If  the  taker  of  interest  is  Avronging  his  fellow- 
man  the  fellow-man  has  a  right  to  have  that  wrong 
abated,  and  this  is  the  only  vested  right  which  a  just 
civilization  can  recognize.  It  does  not  make  it  better 
to  say  that  the  government  has  from  time  immemorial 
allowed  the  ancestors  of  the  usurer  to  wrong  the  ances- 
tors of  the  laborer.  That  is  all  the  greater  reason  why 
the  wrong  should  cease  and  the  conscious  or  unconscious 
wrong-doer  be  satisfied  to  let  bygones  be  bygones.  Even 
if  in  our  imperfect  courts  of  law  wealth  has  been  wrong- 
fully converted,  restitution  will  be  compelled  of  the 
innocent  beneficiary.  We  cannot  cavil  at  the  justice 
of  a  similar  proceeding  in  this  case.  But  restitution  is 
not  asked.  Let  bygones  be  bygones.  No  one  but  a  fool 
or  a  knave  would  talk  of  the  division  of  property.  All 
that  is  asked, is  that  henceforward  everyone  be  allowed 
to  keep  his  own  and  no  more.  The  effect  would  be 
magical. 

But  now  comes  our  reform  friend  riding  on  his  hobby, 
an  excellent   nag,  to  be  sure,  but  not  able  to  bear  all 


A  BREED  OF  BARKEN  METAL  22U 

burdens.  "My  reform  will  make  yours  unnecessary. 
Follow  me!''  Mistaken  enthusiast,  no  one  reform  can 
make  the  world  what  it  should  be.  There  is  more  than 
room  for  all.  Every  reform  founded  on  truth  is  needed. 
Every  wheel  of  the  social  car  must  run  in  the  groove  of 
natural  law  if  we  would  avoid  soul-destroying  friction 
and  frequent  wreck.  Let  us  not  be  narrow  enough  to 
place  one  little  truth  before  our  eyes  so  closely  as  to  shut 
out  the  sublime  possil)ilities  of  God's  universe. 

This  sermon  is  particularly  intended  for  the  single- 
tax  advocates  svho  seem  to  pooh-pooh  aught  else  than 
their  favorite  theory,  and  to  maintain  that  after  tht\t 
reform  is  accomplished  nothing  more  will  remain  to  he 
done.  As  I  take  it, the  doctrine  is  not  preached  by  the 
leader  so  much  as  by  the  followers.  As  I  hope  I  have 
already  made  evident,!  have  not  the  slightest  intention 
of  opposing  land  reform.  It  is  both  necessary  and 
fundamental  and  perhaps  in  strict  philoso])hy  should 
come  first,  Ijut  it  is  no  more  fundamental  nor  iin|)urt- 
ant  tiian  the  proposed  reform.  In  the  light  of  both 
tiie  past  and  the  present,  I  would  judge  that  the  usurer 
has  done  and  is  doing  more  harm  than  the  landlord. 
It  was  the  usurer  who,  through  usury,  came  to  possess 
the  land, rather  than  the  landlord  who  becama  the  usurer. 
How  land  reform  could  reform  currency  or  destroy  in- 
terest-taking, is  not  at  all  evident.  Its  greatest  apostle 
thinks  that  it  would  increase  interest  and  I  agree  with 
him. 

As  is  stated  aljove,  land  reform  in  itself  is  a  consum- 
mation devoutly  to  be  wished.  A  single-tax  on  land, 
if  it  is  ptjssible,  is  the  most  direct,  certain  and  econom- 
ical tax  and  therefore  the  best.  It  is  the  tax  which 
w<nild  [)rove  the  death-warrant  of  the  public  squander<;r 
and  petty  tyrant.  Hut  can  a  single  land  tax  be  so  levied 
as  to  take  land  from  the  grasp  of  the  monopolist  nnd 
si)eculator  and  deliver  it  over  to  the  toiler?  Will  it 
nationalize  land?  Here  is  the  ihiI).  Here  is  where  the 
reim-dy  must  fail  of  the  ideal  completeness  which  is 
claimed  for  it  Ijy  its  enthusiast ii*  supporters. 

The  conclusions  arrived  at  by  single-taxer.s  are  much 
better  than  the  reasons  which   they  give  tor  those  con- 


280  A  BREED  OF  BARRE  N  METAL 

elusions.  They  are  entirely  right  in  the  idea  that  the 
land  should  l)e  practically,  if  not  actually  the  common 
property  of  all.  They  are  entirely  wrong  in  the  assump- 
tion that  land  values  are  not  the  product  of  the  toil  of 
hand  and  brain,  and  that  nature  has  a  greater  share 
than  man  in  the  production  of  wealth.  They  are  still 
wrung  when  they  assume  that  it  is  because  the  laborer 
has  no  share  in  the  production  of  land  values,  that  he 
is  not  entitled  to  remuneration  for  allowing  these  val- 
ues to  be  used. 

If  the  contributions  of  nature  and  of  man  himself  to 
the  needs  of  the  race  are  to  be  compared  at  all,  we  must 
set  what  nature  offers  without  any  aid  from  man,  over 
against  what  man  adapts  from  the  stores  of  nature. 
We  must  compare  what  nature  does  through  man  with 
Avhat  nature  does  outside  of  him.  Otherwise  our  com- 
parison can  mean  nothing,  for  man  is  a  part  of  nature 
and  subject  to  its  laws.  All  that  he  has,  all  that  he  is 
or  ever  can  be,  comes  to  him  from  nature.  Looking 
on  the  matter  in  this  light,  nature  does  all  either 
through  man  or  without  him.  But  if  man  is  to  be  an 
element  in  the  calculation  at  all,  we  cannot  look  upon 
it  in  this  sense.  We  must  give  man  credit  of  doing  all 
that  is  done  through  him,  if  we  are  to  give  him  any 
credit  at  all.  There  is  no  other  basis  of  comparison. 
In  that  sense  man  produces  all  wealth.  Production  is 
adaptation.  Nature  furnishes  the  material  to  adapt, 
but  this  material  has  no  value  until  adapted.  It  is  the 
adaptation,  and  the  adaptation  only  which  gives  the 
free  gifts  of  nature  (exchange)  value;  and  exchange 
value  is  the  only  value  with  which  political  economy 
has  to  deal.  Nothing  but  human  labor  can  adapt  any- 
thing to  satisfy  the  wants  of  man.  Nothing  else  can 
produce  wealth.  It  is  the  act  of  plucking  the  bread- 
fruit and  eating  it  which  satisfies  primitive  man's  hun- 
ger. It  is  the  labor  of  the  herdman,  the  spinner,  the 
weaver,  etc.,  which  turns  the  wool  into  a  coat.  Nature 
invariably  resists  this  adaptation,  sometimes  more  and 
sometimes  less,  so  that  it  takes  an  exertion  called  labor 
to  accomplish  it.  In  fact  the  very  thing  which  dis- 
tinguishes, wealth  from  non-wealth,  is  the  circumstance 


A  BREED  OF  BARREN  METAL  231 

that  it  was   produced  by  man  and  not  supplied  freely 
by  nature. 

If  this  be  true,  and  it  is  incontrovertible,  unimproved 
land  has  no  value  and  never  can  have.  (It  has  neither 
exchange  nor  rental  value.)  Any  land  which  has  value 
must  have  been  improved.  And  this  is  strictly  true  in 
fact.  All  land  commercially  connected  must  be  consid- 
ered as  a  whole.  The  surveyor's  lines  no  more  divide 
land,- economically  speaking,  than  the  equator  or  the 
tropic  of  Cancer.  Any  improvement  in  any  part  im- 
proves the  whole  and  it  is  improvement  on  some  part 
which  gives  value  to  the  whole.  Improvements  in  New 
York  City  give  value  to  land  in  Missouri.  The  value 
may  be  almost  infinitesimal,  Init  it  is  still  given.  Thus 
the  multitudinous  improvements  and  adaptations  on 
earti)  incident  to  human  civilization,  and  these  alone, 
give  value  to  land.  This  civilization  and  the  resulting 
value  which  it  apparently  gives  to  land  is  as  much  the 
product  of  toiler's  hand  and  brain  as  is  any  dwelling, 
any  machine,  any  piece  of  work  in  existence.  It  is  con- 
tributed to  by  the  toilers  in  the  exact  proportion  in 
which  they  produce  wealth,  and  is  as  mueh  theirs  as  is 
anything  which  they  produce.  The  wealth  or  advan- 
tages produced  in  common  by  the  exertion  of  all  attaches 
itself  to  the  land.  A  greater  amount  attaches  itself  to 
the  land  nearest  the  centers  of  greatest  improvement 
and  that  ottering,  for  other  reasons,  the  least 
resistance  to  adaptation  into  wealth.  Other  things  be- 
ing equal,  land  in  New  York  City  is  more  valuable  than 
land  in  Hoboken,  because  it  is  nearer  the  center  of 
greatest  improvement.  For  farming  purposes,  land  in 
Jersey  may  not  be  as  valualile  as  land  in  Pennsylvania, 
for  its  proximity  to  markt't  may  bo  oflfset  by  tlic  great- 
er resistance  which  it  olTors  in  raising  a  cro]).  What 
can  an  isolated  trappi-r,  while  he  remains  isolated,  get 
for  a  sealskin?  Nothing.  It  is  useful  to  him.  So  is 
th(?  land  to  the  isolated  settler,  but  neither  has  ex- 
change value.  Both  increase  in  exchange  value,  both 
incnnise  in  utility,  as  the  isolated  settler  or  trapjxr  .'ip- 
proaches  the  comnnuiity.  The  skin  can  satisfy  nmre 
wants  in  New  York  than  in    Alaska,  tluj   land  mnic    in 


282  A  BREED  OF  BARREN  METAL 

Jerse}'^  than  in  the  wilds  of  Africa.  They  both  have 
greater  value  in  every  sense.  That  value  is  given  in 
both  cases  by  the  civilization  built  up  by  the  labor  of 
the  community.     Value  is  a  product   of  society. 

The  values  contributed  by  the  individual  to  the  com- 
mon reservoir. of  civilization  attach  to  land;  the  values 
created  by  individual  exertion  for  individual  use  have 
land  attached  to  them.  The  former  can  be  enjoyed  by 
access  to  land.  The  latter  must  come  actually  into  the 
possession  of  consumers.  By  assuming  exclusive  pos- 
session of  what  is  produced  by  individuals  in  excess  of 
what  is  needed  to  supply  their  immediate  wants,  cap- 
italists are  enabled  to  shut  out  laborers  from  the  use  of 
that  portion  of  their  patrimony  which  has  crystallized 
into  machinery  and  improved  processes  of  production. 
By  assuming  exclusive  possession  of  the  land,  landlords 
are  enabled  to  shut  out  from  them  the  use  of  that  por- 
tion of  their  patrimony  which  has  collected  into  the 
common  reservoir  of  civilization,  and  can  be  enjoyed 
only  in  connection  with  land.  But  they  do  more  than 
this:  they  shut  them  away  from  the  land  itself,  which 
is  the  free  gift  of  nature  to  all.  Land  values  and  all 
other  values  are  created  in  precisely  the  same  way. 
They  both  belong  to  the  producers,  butonly  in  usufruct. 
The  use  of  wealth  other  than  land  necessarily  carries 
with  it  possession,  and  if  the  prodticer  wishes  to  use  it 
he  should  certainly  have  possession  of  it.  He  has  a  bet- 
ter right  than  any  one  or  every  one  else.  The  use  of 
land  values  carries  with  it,  not  the  possession  of  the 
values  themselves,  but  the  possession  of  some  of  the 
land  to  which  they  attach.  They  are  always  ready  for 
him  who  wishes  to  use  them  and  has  access  to  land. 
As  the  values  attached  to  land  are  no  more  productive 
than  the  values  attached  to  any  other  form  of  wealth, 
no  matter  how  large  a  share  one  has  had  in  the  produc- 
tion of  these  values,  he  is  entitled  to  no  remuneration 
for  having  these  values  used  by  some  one  else;  provided 
always  that  he  is  allowed  to  use  them  to  the  full  extent 
to  which  he  is  capable  of  using  them  in  production 

There  are  pieces  of  land  to  which  attach  a  greater 
amount  of  this  value  which  is  the  common  property  of 


A  BREED  OF  BARREN  METAL  288 

al],  and  pieces  of  land  to  which  attach  a  less.  That 
is,  in  the  adaptation  of  nature's  gifts,  there  are  lines 
of  greater  and  lines  of  lesser  resistance,  depending  on 
the  locality  of  the  process. of  adaptation.  The  advan- 
tage of  the  locality  of  least  resistance  over  greater,  is 
the  rental  value  of  land.  The  discovery  and  utilization 
of  these  advantages, like  the  invention  of  machinery  or 
the  adaptation  of  any  other  of  nature's  forces,  is  due 
to  the  cunning  of  man's  hand  and  brain.  But  it  is  due 
to  no  one  man  and  no  one  man  should  receive  a  special 
advantage  therefrom. 

If  the  multitudinous  improvements  and  adaptations 
produced  by  toiler's  hands  and  brain,  and  incident  to 
civilization,  have  produced  so-called  land-values,  then 
population  has  not.  Increased  population  is  but  an 
effect  of  the  same  cause  which  produces  increased  land 
values.  The  erroneous  idea  that  demand  determines 
value,  is  at  the  bottom  of  the  error.  Demand  is  nothing 
more  than  a  regulator,  like  a  governor  on  a  steam  en- 
gine. The  labor  required  to  produce  a  thing  determines 
its  value. 

The  land-values  are  produced  by  toilers  just  as  truly 
as  are  the  values  of  anything  else.  They  should  not  be 
parceled  out  among  toilers,  Ijecause  it  is  impracticable, 
as  well  as  unnecessar}''  to  their  full  legitimate  enjoy- 
ment. Rent  should  be  left  in  possession  of  the  com- 
munity, not  because  it  is  not  produced  by  the  individuals 
of  the  community,  but  because  it  can  best  be  distributed 
among  those  who  produced  it,  by  using  it  for  the  com- 
mon benefit  of  all.  It  is  merely  ridiculous  to  hold  that 
men  have  any  right  other  than  in  usufruct  to  other 
|)roperty,  and  to  deny  tlieir  right  to  land  values.  Their 
rights  to  both  are  exactly  the  same  and  spring  from  th(* 
same  source.  They  have  no  greater  right  to  one  than 
the  other.  They  have  a  right  to  remuneration  for  the 
use  of  neither,  for  neither  is  of  itself  ])ro(luctive. 
Single-taxers  cannot  deny  these  princi[)l(!s  and  still  re- 
tain a  basis  for  their  theory.  They  caiu)ot  condemn  the 
landlord  and  shield  the  usurer  even  in  theory.  Thi 
principles  whi(;h  {Condemn  intcrnst  must  i)e  invokiil  to 
condemn  r(Mit-l;iking  liy  private  in(li\'i(lu;ils    uoih'  dtlicrs 


234  A  BREED  OF  BARREN  METAL 

will  answer.  The  problem  before  single-taxers  is  to 
innke  land  values  truly  the  common  property  of  all. 
Will  the* single  tax  accomplish  this? 

We  must  take  people  as  they  are.  The  passage  of  a 
single-tax  law  will  make  the  average  citizen  little  bet- 
ter than  he  now  is.  It  may,  to  be  sure,  be  an  evidence 
that  he  is  advancing  in  enlightenment.  After  its  passage 
we  have  merely  a  law  to  be  interpreted  and  adminis- 
tered by  men.  To  say  that  the  result  will  be  perfection 
is  like  failing  to  allow  for  friction  in  estimating  the 
working  power  of  a  machine 

To  make  the  remedy  complete  the  whole  rental  value 
of  the  land  must  be  taken  in  taxes,  no  more,  no  less. 
If  more  is  taken  it  will  ruin  the  business  conducted  on 
the  land.  If  less, it  will  leave  a  margin  of  })rofits  to  the 
landlord  and  speculator.  The  assessor  must,  then,  es- 
timate very  closely  what  the  actual  rental  value  of  the 
land  is.  Can  he  do  this?  Will  he  do  this?  He  does 
not  do  it  now,  he  does  not  begin  to  do  it.  In  some  in- 
stances he  gets  eighty  per  cent  of  the  value  of  the  land 
and  in  some  not  twenty.  He  may  even  assess  a  piece 
now  and  then  for  more  than  its  actual  value.  Now  he 
has  a  perfect  guide  to  go  by.  The  exchange  value  and 
the  current  interest  on  investments  give  him  data  which 
will  lead  to  most  accurate  judgments  of  the  rental  val- 
ue of  the  land.  The  selling  price  of  the  land  is  a  per- 
fect index  of  its  assessable  value.  He  fails  now  through 
incompetence  or  dishonesty.  These  elements  must  be 
allowed  for  in  the  assessor  of  the  future.  And  what 
tangible  criterion  will  he  have  on  which  to  base  a  judg- 
ment of  taxable  valuation.  None  at  all.  If  the  remedy 
is  of  any  avail  it  will  destroy  the  value  (exchange)  of 
land  entirely.  One  can  sell  land  itself  for  practically 
nothing.  He  will  have  simply  the  owner's  statement 
as  to  what  the  land  is  worth  to  him,  on  which  to  base 
the  assessment.  He  may  assess  a  piece  of  vacant  land 
as  highly  as  a  piece  of  improved  land  beside  it,  but  as 
for  assessing  the  improved  land  he  will  be  entirely  at 
sea.  In  the  rental  of  improved  lands  the  land  and  im- 
provements are  hired  out  together.  The  assessor  might 
by  an  inquisitorial  process  find  out  the  income  of  each 


A    BREED    OF    BARREN    METAL  1235 

piece  of  improved  real  estate.  Then  he  must  find  out 
how  much  of  that  income  is  due  to  land,  how  much  to 
improvements.  He  can  arrive  at  a  conclusion  only  by 
closely  estimating  the  value  of  improvements  and  de- 
ducting the  amount  of  the  income  due  to  them  from 
the  whole  income.  He  must  take  the  owner's  statement 
for  this,  for  we  have  yet  found  no  better  way.  It  would 
involve  all  of  the  difficulties  which  render  the  levy  of 
personal  taxes    at  present  so  annoying  and  unjust. 

We  might  say  that  the  assessor  might  judge  by  what 
others  paid.  This  begs  the  question, for  the  others  must 
first  be  dealt  with.  We  might  give  the  land  to  the 
highest  bidder  This  would  not  help  the  matter.  If  a 
bidder  take  improved  land  he  must  pay  for  the  im- 
provements at  the  owner's  price  or  the  state  must  com- 
pel the  owner  to  sell  at  an  arbitrary  valuation.  The 
former  would  defeat  the  law.  The  latter  would  intro- 
duce the  principle  of  taking  private  property  for  private 
use,  a  very  dangerous  innovation. 

It  is  ignoring  facts  to  say  that  the  rate  of  rent  is  not 
now  estimated  on  the  basis  of  exchange  valuation. 
Every  man  counts  his  land  in  dollars,  as  he  does  his 
capital, and  estimates  that  it  should  bring  a  certain  re- 
turn. If  all  were  perfectly  willing  to  tell  all  they 
know,  the  assessment  might  not  be  so  difficult,  but 
they  are  not.  It  is  quite  high-sounding  as  an  oratorical 
11ouri?^h  to  say  that  men,  like  hogs,  must  be  led  to  re- 
form by  the  ])rospect  of  gain.  This  is  what  the  single- 
taxers  say  they  (jft'er.  Gain  for  whom?  If  it  is  gain 
f(jr  the  many,  then  the  answer  is  that  the  many  are 
(jften  blind  to  their  own  interest,  and  the  best  of  laws 
may  fail  through  ignorance.  All  just  laws  are  for  the 
benefit  of  the  many,  but  if  all  just  laws  were  carried 
out  in  their  letter  and  spirit  tlien^  would  to-day  be  no 
place  for  the  reformer.  Then  the  many  are  not  they 
with  whom  the  single-taxer  has  to  deal.  The  many  are 
not  enrichi)ig  tliemselves  on  land  rents  at  Hk;  expense 
of  the  few.  If  the  few  is  meant,  then  tiie  proposition 
is  false.  The  singlf-tax  or  any  other  just  law  is  not 
for  the  pers(jnal  inter(;st  of  the  few  who  fatten  at  the 
expense  of  their  brothers,  and  can  ii<it    appeal   to  them 


286  A  BKEED  OF  BARREN  METAL 

on  that  score.  A  t  least  it  is  not  for  their  pecuniary 
interest,  which  they  consider  paramount  to  all  others. 
The  single-tax  law  is  for  the  especial  purpose  of  cir- 
cumventing those  who  thrive  at  the  expense  of  their 
fellow-men,  and  obliging  them  to  relinquish  their  un- 
just advantages.  On  that  score  it  will  be  necessarily 
fought  to  the  bitter  end  by  all  beneficiaries  of  the  pres- 
ent system.  The  same  opposition,  no  more,  no  less,  is 
encountered  by  all  just  laws. 

Then  improvements  are  at  present  made  only  on  very 
long  ground  leases,  fixed  as  to  rate  for  definite  periods. 
Would  private  parties  or  corporations  improve  ground 
in  the  possession  of  which  they  were  secure  for  but  a 
year?  Could  security  at  a  fixed  rate  be  given  for  a 
much  longer  period  without  jeopardizing  the  effective- 
ness of  the  law,  at  least  as  to  that  piece  of  land? 

The  land  reform  is  not  only  not  the  sole  reform,  but 
it  presents  questions  and  difficulties  at  least  as  grave 
as  that  of  any  other  well-grounded  movement.  It 
seems  from  my  present  light  on  the  subject  that  the 
single-tax,  to  be  practicable,  must  be  levied  so  as  to 
leave  some  exchange  value  to  land;  or  so  that  the  state 
may  absorb  all  interest  and  rent  actually  charged  on 
land  and  improvements.  Unused  land  may  be  taxed  as 
highly  as  improved  land  in  the  same  locality,  and  the 
speculation  in  land  and  extensive  monopoly  of  this  ne- 
cessity to  existence  would  be  greatly  ameliorated.  It 
would  furnish  an  economical  and  just  means  of  revenue, 
settling  the  tariff  question  once  for  all.  On  these 
grounds  it  is  amply  deserving  of  the  intelligent,devoted 
support  which  it  is  receiving.  But  do  not  set  it  up  as  a 
panacea.  It  is  a  law-reform,  the  efficacy  of  which  will 
depend  on  its  administration,  nothing  more. 

It  is  true  that  advocates  whose  zeal  outruns  their  judg- 
ment announce  in  sounding  sentences  that  all  wealth 
might  be  destroyed  from  the  earth  and  people  would 
tap  the  earth  and  create  it  again;  implying  that  they 
would  do  this  without  serious  inconvenience.  This  state- 
ment is  so  utterly  extravagant  as  to  be  virtually  false. 

What  was  left  of  the  inhabitants  of  the  earth  after 
such  a  calamity  as  the  destruction  of  aU  wealth  would 


A  BREED  OF  BARREN  METAL  237 

tap  the  earth  and  re-create  enough  to  support  them, 
hut  what  would  be  left?  Bands  of  savages  in  the  warm 
zones  of  continents, where  fish  and  game  and  wild  fruit 
are  abundant.  All  questions  of  civilization  would  go 
back  several  centuries  and  men  would  work  out  their 
salvation  anew.  This  is  not  the  question  confronting 
economists  and  sociologists  to-day.  We  wrestle  with 
the  problem  of  making  life  more  satisfactory  for  ihe 
teeming,  increasing  millions  now  on  earth. 

If  any  one  doubts  the  truth  of  the  above  view  of  the 
reformer's  statement,  let  him  divest  himself  of  all 
wealth  and  friends,  and  induce  a  body  of  mortals  like 
himself  to  do  likewise,  and  without  even  the  traditional 
fig-leaf,  let  them  turn  themselves  loose  on  bare  land, 
and  refusing  assistance  from  all,  "tap  if'  and  revel  in 
the  flow  of  luxuries  during  a  cold  northern  winter. 
But  this  is  making  too  much  of  a  puerile  statement. 
The  moral,  however,  is  that  in  our  present  state  our 
garnered  wealth  is  scarcely  less  necessary  than  land, 
and  the  control  of  that  wealth  enables  one  to  collect 
interest  just  as  it  does  the  landlord  to  collect  rent. 

If  rent  were  the  only  source  of  great  and  dangerous 
wealth  those  who  own  land  of  the  largest  value  should 
be  the  wealthiest  and  most  dangerously  inclined.  As  a 
class  farmers  are  comparatively  the  heaviest  land  own- 
ers; yet,as  a  class,  they  are  the  poorest  citizens.  They 
own  one-third  of  the  land  and  yet  receive  but  about  one- 
sixth  of  the  product  of  the  country's  industries. 

It  is  entirely  certain  that  anything  which  would  de- 
stroy the  exchange  value  of  land  would  make  these  val- 
ues attach  themselves  to  other  forms  of  wealth,  and 
without  some  better  industrial  system  than  the  pres- 
ent, what  would  be  saved  in  rent  would  be  paid  in 
interest. 

It  is  as  important  that  the  currency  and  .system  of 
exchange  should  be  such  that  every  man  should  get  all 
ihe  benefit  of  the  wealth  he  labored  for  as  an  individ- 
ual or  produced  as  part  of  a  great  civilization,  as  it  is 
that  th(!  land  laws  should  l)e  such  that  each  sIioiiUl  g<.'t 
a  sliarf!  of  the  hind  values  he  h(!l|)s  to  i)rodu('e.  If  he 
were  allowed  to  kfjep  what  he  ])r(jduces  as  an  individ- 
ual, the  first  requisite  would  Ije  satisfied. 


238  A  BREED  OF  BARREN  METAL 

*  Land  reformers  maintain,  with  reason,  that  men  do 
not  produce  land  and  hence  it  cannot  be  theirs.  That 
it  belongs  to  men  individually  or  collectively  in  usufruct 
only  and  hence  an  absolute  title  thereto  cannot  be  ac- 
quired. It  is  the  birthright  of  all  the  generations  of 
men.  How  then  can  the  payment  of  rent  to  the  state 
give  absolute  title  to  gold  or  silver,  iron,  coal,  copper, 
timber  or  a  thousand  other  things  limited  in  quantity? 
There  is  no  generic  difference  in  that  respoct  between 
these  and  land.  The  process  of  reasoning  which  rele- 
gates land  monopoly  to  the  dark  ages  proclaims  that 
at  least  all  forms  of  wealth,  the  natural  basis  for  which 
is  incapable  of  reproduction  and  limited  in  quantity, 
can  be  claimed  in  usufruct  only  and  that  one  man  caii- 
not  justly  charge  another  for  their  use. 

There  are  others  of  an  advanced  turn  of  mind  who 
see  in  postal  savings  banks  a  cure  for  financial  ills. 
How  short-sighted!  If  the  postal  savings  bank  does 
not  give  the  depositor  interest  it  will  have  an  insignifi- 
cant patronage.  Other  banks  will.  If  it  does,  then  the 
body  of  usurers  has  been  increased,  and  the  mud  sills 
further  oppressed.  What  have  postal  savings  banks  to 
do  with  the  establishment  of  a  rational  currency  or  the 
prevention  of  interest-taking? 


CHAPTER  XXXIV. 


Results— The  destruction  of  interest-taking — What  would  follow— Division  of 
wealth  — Not  fanciful— The  advantage  of  the  possessor  of  surplus  wealth — Its 
results— The  problem  we  must  solve— Important  natural  truths— Applied— The 
rank  and  file  of  toilers  —They  must  work  out  their  own  salvation — The  mistake 
of  refoniers — Tariff-reform— The  same  mistake  with  currency  reform    must    be 


Intelligence 

The  thistle  cannot  be  destroyed  by  cuttimi  down  and 
scattering  ?/.s  seeds  on  the  ground. 

Here  is  a  means  by  which  interest-taking,  the  com- 
mercial incubus  of  the  modern  world, may  be  remoyed. 
Destroy  interest-taking  and  all  men  might  work  to- 
gether in  harmony,  each  receiving  his  own.  In  a  com- 
munity where  no  hoarded  fortune  could  last  longer 
than  a  generation,  all  would  be  obliged  to  work.  When 
each  would  be  obliged  to  work  for  what  he  got,  men 
would  soon  find  that  they  could  work  to  better  advan- 
tage in  unison  than  each  one  for  himself.  Capital  would 
be  combined  and  the  best  adapted  for  each  task  would 
find  his  pro]ier  sphere.  Great  companies  of  toilers 
working  together  like  bees  in  a  hive  would  make  pro- 
duction more  effective  than  ever  before.  There  would 
be  no  clash  of  interest  as  at  ])resent,  no  preying  of  one 
on  another;  he  who  advanced  his  own  interests  must 
advance  the  interests  of  all.  The  bitter  hate  and  dark 
contempt  of  the  toiler  for  his  master  and  the  master 
for  the  toiler  would  cfasi-  to  be  The  feverish  problems 
of  industrial  rights  would  l)ecome  clearer. 

W<'  would  hear  no  more  of  the  menace  and  injustice 
of  large  fortunes.  C(!ase  to  allow  the  Astors  to  collect 
rent  and  interest,  and  in  five  years  their  power  would 
have  fallen  1o  the  Ir-vel  of  ordinary  citizens.  Their 
ffirtunes  could  not  [)lay  tyrant  for  them.    Their  wealth 

23M 


240  A  BREED  OF  BARREN  METAL 

would  disappear  slowly  but  surely  until,  sometime, that 
family  must  take  up  the  burdens  and  live  the  lives  of 
other  mortals.  They  would  then  soon  sympathize  with 
others'  needs.  As  soon  as  interest-taking  Avas  made 
impossible,  toilers  would  cease  to  pay  attention  to  the 
holders  of  large  fortunes.  There  would  be  neither  dis- 
position nor  necessity  for  disturbing  old  fortunes. 
Wealth  would  rapidly  accumulate  in  the  hands  of  toil- 
ers, and  idlers  would  be  bra  nded  with  the  pauper's 
stamp.  The  pauper  millionaire  would  become  an  ex- 
tinct species, like  the  buffalo  and  the  bear.  The  march 
of  civilization  would  have  stamped  him  out.  No  matter 
how  shrewd,  or  unscrupulous,  or  avaricious  the  money- 
getter  might  be,  he  would,  without  the  aid  of  rent  or 
interest-taking,  be  utterly  powerless  to  oppress  any  one 
by  the  force  of  the  wealth  which  he  might  accumulate. 
It  is  often  said  nowadays  that  if  the  wealth  of  the 
world  were  evenly  divided  it  would  within  a  short  time 
again  accumulate  in  the  hands  of  the  same  favored  few. 
Granting  that  there  is  truth  in  the  statement,  it  proves 
nothing  except  that  our  laws  are  unjust.  Leave  the 
laws  as  they  are  and  the  unscrupulous,  avaricious 
schemer  will  usually  get  the  fat  of  the  land.  Put  in 
force  equitable  laws  of  distribution  and  the  differences 
in  fortune  will  represent  merely  difference  in  ability  to 
produce.  Those  entitled  lo  wealth  would  have  it.  All 
would  work  and  nobody  would  be  obliged  to  toil  exces- 
sively. Relieved  of  the  leisure-bred  devices  of  extrava- 
gant ease,  our  lives  would  become  more  rational  and 
simple, and  the  frivolous  exactions  which  now  weigh  so 
heavily  on  our  time  and  resources  would  quite  disappear. 
All  who  were  willing  to  toil  would  have  leisure  for  jvc- 
reation  and  improvement.  Art,  letters,  science,  miglit 
be  cultivated  as  pastimes  by  all  having  such  inclina- 
tions. We  would  not  have  one  man  with  an  abnormal 
development  of  brain  working  among  ten  thousand 
dunces  who  could  not  understand  his  thoughts.  All 
•would  be  cultivated  and  intelligent.  Remove  the  in- 
cubus of  want  (jr  fear  of  want  from  man  and  he  would 
be  comparatively  an  archangel.  Before  the  gaze  of  such 
a    being,  crime,    like  fallen    man,    would  slink  away 


A  BREED  OF  BARREN  METAL  241 

ashamed.  Three  pairs  of  handsj  would  dispose  of  what 
one  wrestles  with  to-day  and  the  task  would  be  light 
to  each.  Panics  would  be  a  thing  of  the  past.  De- 
pression could  follow  natural  calamity  only  and  the 
vigorous  country  would  soon  recover  itself  from  the 
severest  natural  strain.  Give  the  producer  the  full 
measure  of  what  he  produces  and  a  giant  stride  will 
have  been  made  toward  making  the  earth  what  it  is 
intended  to  be,  a  pleasant  abiding  place  for  man.  Then 
and  then  only  can  we  have  the  hai>piness  of  the  fullest 
development  and  enjoyment  of  all  natural  powers. 

This  is  not  a  fanciful  picture.  It  is  not  claimed  that 
the  reform  suggested  will  make  the  earth  a  paradise, 
but  it  will  make  it  more  nearly  one  than  it  has  ever 
yet  been.  It  will  lay  one  true  foundation  principle  on 
which  future  fabrics  of  civilization  may  rest  secure.  It 
will  be  transferring  our  social  edifice  from  its  founda- 
tion of  sand  to  one  of  solid  rock. 

While  we  give  such  immense  advantage  to  possessors 
of  surplus  wealth,  all  men  will  strive  to  amass  a  sur- 
plus by  any  means,  however  dishonest.  Men  have  long 
since  learned  that  in  the  present  order- of  tilings  no  one 
can  ever  become  wealthy  hy  his  own  efforts  in  produc- 
tion. Tiie  secret  of  wealth,  the  philosopher's  stone  of 
the  modern  world,  is  known  to  i)e  the  appropriation  Ijy 
one  man  of  the  results  of  tlie  tcjil  of  hundreds.  It  is 
nonsense  to  say  that  a  fortune  ol'  a  million  can  l)e 
amassed  in  any  other  way.  One  might  produce  in  any 
tangil)le  line  of  industry  for  ten  lifetimes  and  still  not 
produce  to  the  value  of  a  million.  How  to  save  what 
he  earns  is  not  now  the  study  of  the  man  of  atl'airs. 
I)ut  how  to  obtain  legally  the  earnings  of  others.  Every 
l)usiness  man's  aim  under  such  a  system  is  necessarily 
to  take  every  advantage  of  his  neighbor  which  willgivi* 
himself  the  l)etter  of  the  bargain.  This  is  "Inisiness. '' 
Destroy  the  law  l)y  which  man  is  (Muibled  to  ap[)ropri- 
ate  the  results  of  the  toil  of  his  feUow-men  and  you 
remove  not  only  his  power  butliis  motive  for  working 
injustice.  If  required  to  rely  for  fortune  on  what  he  him- 
self produced  hf  would  turn  his  attention  to  production, 
not  to   (ilchiiii'    from    his   f«^Ilo\vs.      A    ra(.'i'   of    hiiin;iii 


-42  A  BREED  OF  BARREN  METAL 

tigers,  jackals  and  asses  would    be   trausforuied   into  a 
comnninity  of  soulful,  thinking    men  and  women. 

There  is  another  side  to  the  picture.  We  are  face  to 
face  with  the  problem  of  the  race;  viz.,  whether  the 
many  were  born  to  })e  the  hewers  of  wood  and  drawers 
of  water  of  the  few.  Civilization  has  not  yet  begun  to 
solve  it.  It  has  been  put  off  for  us  by  broad  continents 
and  virgin  resources  to  subdue  and  enjoy.  We  have 
now  reached  the  length  of  our  tether.  We  are  thrown 
back  upon  ourselves.  Our  country's  prestige  as  a  prom- 
ised land  is  ebbing.  The  rights  of  humanity  are  at 
stake.  We  must  decide  what  they  are  and  how  they 
shall  be  preserved. 

.  Invention,  the  handmaid  of  industry,  has  been  be- 
guiled to  the  ministry  of  mammon.  We  are  plunging 
forward  to  the  plutocratic  goal  on  the  wings  of  steam 
and  electricity.  Crises  and  panics  have  become  as  reg- 
ular as  eclipses. 

For  those  who  believe  in  manhood,  in  the  right  of  all 
men  to  life,  liberty  and  the  pursuit  of  happiness,  un- 
shackled by  the  privileges  of  tyrants  and  minions  of 
self-assumed  privilege;  for  those  who  deny  that  any 
other  man  has  a  right  to  rule  over  him  without  his  con- 
sent, or  that  any  one  has  a  right  to  take  what  he  pro- 
duces without  giving  him  just  return — in  a  word,  for 
all  freemen,  there  is  but  one  course  to  pursue.  Go 
back  to  the  eternal  laws  of  right  and  there  lay  the 
foundations  for  your  constitutions.  Take  the  truths 
proclaimed  by  nature  as  your  polar  star  and  let  these 
guide  you  to  the  goal  of  justice  between  man  and  man. 

The  most  important  natural  truths,  with  regard  to 
the  body  industrial, are:  That  wealth  alone  supplies  the 
tangible  wants  of  man;  that  no  wealth  produces  itself; 
that  he  who  produces  it  is  primarily  entitled  to  the 
wealth  which  he  himself  produces;  that,  therefore,  he 
is  not  primarily  entitled  to  that  which  any  one  else 
produces;  that  the  laborer  produces  all  wealth;  that 
the  wealth  which  he  produces  is,  in  itself,  not  only 
non-productive  but  comprehends  the  natural  princijile 
of  decay;  that,  therefore,  it  is  advantageous  to  its  pos- 
sessor for  consumption  only,  and  its  possession  can  not 


A  BREED  OF  BARREX  METAL  243 

be  made  the  basis  of  a  valid  claim  tor  any  portion  of 
what  any  one  else  produces;  that  the  laborer,  there- 
fore, is  primarily  entitled  to  all  wealth.  I  have  applied 
these  principles. 

Not  one  of  these  truths  will  harmonize  with  interest- 
taking.  Interest-ttiking  must  be  eliminated  before  an 
industrial  system  founded  upon  true  principles  can  be 
established. 

T  iuive  pointed  (Jut  the  way.  Tha  plan  is  feasible,  the 
principles  sound.  Examine  them,  and  if  you  find  them 
contrary  to  truth  reject  them,  but  be  sure  of  your  case 
before  you  decide.  The  principles  are  not  occult.  Go 
to  the  task  with  a  love  for  truth  and  you  can  under- 
stand. If  you  find  the  princii>les  sound  make  it  your 
aim  as  a  freeman  to  establish  them.  It  is  in  your  power. 
You  must  do  it  all  yourself.  The  vulture  thrives  on 
destruction.  A  great  body  of  our  [)eople,like  them, are 
growing  fat  on  the  industrial  wrecks  about  them.  They 
will  oppose  change.  They  will  bo  specious  and  cun- 
ning and  adroit.  They  will  ridicule  and  rant.  They 
have  you  by  the  throat.  The  power  and  organizati<m 
are  theirs.  They  will  press  you  hard,  but  if  the  free- 
man strikes  home,  if  he  goes  to  the  foundation  and 
Ijuilds  on  truth,  no    corrupt  power  can  overthrow  him. 

The  rank  and  file  of  toilers  must  work  out  their  own 
salvation.  All  experience  indicates  that  one  having  an 
advantage  will  never  give  it  uj)  of  his  own  accord.  It 
is  those,  then,  who  suffer  by  the  [)resent  industrial  or- 
ganization who  must  l)ring  about  a  ciiange  for  the  bet- 
ter. Let  each  fair-minded  citizen  convince  himself  and 
then  go  ahead  aiul  see  that  his  convictions  are  put  into 
practical  form.*  It  may  be  necessary  to  make  a  little 
compr(jinise  on  detail,  but  on  principle,  never.  In  the 
cause  of  right,  he  who  wavers  is  lost,  and  it  is  better 
for  the  community  to  make  the  change  thorough-going 
at  once.  What  would  one  think  of  a  surgeon  who  would 
cut  off  a  limb  piecemeal,  gangrened   though    it    be,  for 

*To  the  reformer  who  is  really  in  earnest  there  never  was  a  better  opportunity 
than  now.  Men  are  bre  iking  away  from  parly  control  and  the  set  of  men  who 
will  orcanize  a  party  on  truly  democratic  principles  is  sure,  soonpr  or  later,  to 
carry  the  day.  If  they  want  initiative  and  referendum  let  them  lirst  introduce 
these  pi  inciples  in  the  government  of  the  politi<-al  party  wliich  advocates  such 
reform.  Destroy  dictatorship  in  party,  and  in  the  nation  your  work  is  halt  ac- 
complished. 


-44:  A  BREED  OF  BARREN  METAL 

the  purpose  of  sparing  the  patient  suffering?  With  the 
stumbling,  timid  citizen  the  case  is  the  same.  He 
wastes  his  energies  in  trifles  which  bring  no  tangible 
results  until  the  country  becomes  so  tired  of  tinkering 
that  it  casts  aside  himself  and  his  reforms. 

This  has  been  the  fatal  mistake  of  tariff  reformers. 
If  they  had  done  what  the  people  authorized  them  to 
do,  this  country  would  be  rid  to-day  of  the  idiotic  spirit 
of  narrow  provincialism  which  has  attenuated  the  great 
Chinese  Empire  into  a  second  dotage.  International 
intercourse  is  the  only  civilizer  yet  discovered.  Instead 
of  that,  the  majority  of  citizens  are  proclaiming  the 
beauties  of  exclusion  and  protection  from  the  house- 
tops. They  are  advocating  a  principle  in  economics 
infinitely  more  absurd  than  the  physical  fallacy  of  per- 
petual motion. 

Let  not  the  same  mistake  be  made  with  currency  re- 
form. Free  coinage  of  silver,  real  bimetallism,  if  once 
completely  carried  into  effect  in  a  rational  way,  would 
probably  be  a  considerable  improvement  on  gold,  but 
the  relief  afforded  by  such  a  measure  would  be  entirely 
disproportionate  to  the  pains  required  to  bring  it  about. 
It  would  be  another  case  of  the  mountain  and  the  mouse. 
The  citizen  would  down  the  gold-bug  for  the  silver 
beetle,  and  the  "pale  drudge"  would  soon  be  found  to 
be  as  inexorable  and  brutal  a  master  as  the  yellow  ty- 
rant which  it  had  succeeded.  A  change  in  the  financial 
system  is  inevitable.  It  is  the  burning  question  of  the 
day.  When  it  comes  let  it  be  such  that  those  who 
work  and  suffer  for  it  can  point  to  its  fruits  with  pride 
and  satisfaction.  The  change  must  be  for  the  benefit 
of  the  whole  people.  The  only  change  in  the  financial 
system  which  will  benefit  the  whole  people  is  one  which 
will  destroy  the  monopoly  in  money,  take  it  from  the 
hands  of  the  usurer,  and  make  it  the  instrument  of  ex- 
change accessible  to  all  who  have  wealth  to  exchange. 
It  must  be  a  currency  which  will  put  all  men  as  nearly 
as  may  be  on  an  equal  footing.  It  must  make  it  as 
easy  for  the  producer  of  any  other  wealth  as  for  the 
producer  of  silver  or  gold  to  get  a  dollar.  This  may 
be   accomplished   by  the   proposed   system.      It    is  the 


A  BREED  OF  BARREX  METAL  •         245 

only  system  by  which  it  may  be  accomplished.  I  sub- 
mit it  for  the  consideration  of  all  thinking,  honest  citi- 
zens. 

I  do  not  insist  on  details,  but  I  maintain  that  any 
sound  system  of  currency  must  be  issued  on  wealth  for 
sale  alone,  must  be  issued  for  all  wealth  in  the  process 
of  exchange,  must  be  issued  to  any  one  holding  exchang- 
able  wealth  and  furnishing  security.  That  the  stand- 
ard must  depend  on  the  labor  unit  and  not  on  the  price 
of  any  commodity,  and  that  the  money  token  must 
have  sul:)stantially  no  value.  I  insist  further  that  the 
holder  of  currency  must  be  required  to  beai;  the  burden 
of  care  And  deterioration  of  wealth.  Above  all,  1  insist 
that  the  currency  and  banking  S3^stem  must  be  con- 
ducted by  the  government  only,  in  such  a  manner  as 
to  destroy  interest-taking. 

It  is  in  such  a  reform  and  this  alone  that  the  toiler 
must  look  for  a  betterment  of  his  condition.  There  is 
no  other  reform  which  will  take  its  place.  It  will  not 
take  the  place  of  all  reforms,  but  it  is  vastly  more  im- 
portant than  any  other  yet  proposed.  It  lays  the  ax 
to  the   root  of  the  evil. 

Now  come  forward,  all  ye  usurers  and  money  sharks, 
and  sleek,  fat,  oily  bank  presidents  and  ofiicersof  loan 
and  trust  companies,  and  tell  with  divine  unctuousness 
how  the  pro]iosed  currency  measures  would  ruin  the 
country  and  oppress  the  toiler.  Come  forward  beaming 
with  an  ineffable  light  of  pure  disinterestedness  and 
charity  unadulterate,  and  oppose  it  because  it  would 
ruin  the  lal)orer  and  small  shopkeeper.  Of  course  you 
have  never  given  a  thought  to  its  effect  on  your  own 
pocket  books  and  privileges.  The  altruist  in  you  will 
not  admit  of  that.  You  who  in  the  extreme  goodness 
of  your  souls  lend  for  six  })er  cent  when  you  cannot  get 
twelve,  and  make  a  thousand  by  driving  some  unfortu- 
nate to  the  wall  when  you  cannot  get  advantage  sufli- 
cient  to  make  a  million,  should  l)e  listened  to  as  divine 
oracles  of  the  interests  of  the  rank  and  file.  And  tin- 
business  of  shaving  notes  and  exacting  usury  and  en- 
gine-ering  corners  gives  you  such  a  monopoly  of  [)olit- 
ical  and   economic   knowledge   that  h<j   W(juld    be    rash 


246        .     A  BREED  OF  BARREN  METAL 

indeed  who  would  question  your  inspired  conclusions, 
especially  when  he  knows  the  source  of  inspiration. 

Oh,  no!  the  people  can  never  understand  finances,  we 
could  not  ask  them  to  try  while  we  have  such  an  ex- 
tremely well-paid  and  well-informed  body  of  moneyed 
aristocrats  to  give  the  government  all  the  advice  it 
wants  as  to  the  financial  needs  of  the  people!  And  it 
has  been  always  so  clearly  shown  that  a  man  will  work 
against  his  own  interests  to  further  the  interests  of  some 
other  person.  And  this  is  so  characteristic  of  the  usurer. 

It  would  be  little  short  of  a  calamity  if  the  peojjle 
should  come  to  understand  the  financial  question,  for 
they  are  always  so  perverse  that  their  understanding 
of  things  differs  materially  from  the  understanding  of 
their  millionaire  friends,  and  this  would  be  no  excep- 
tion. 

And  you  millionaires  who  serve  your  country  by 
drinking  foreign  wine,  attending  horse-races  and  de- 
bauching, come  up  and  tell  of  your  divine  right  to  be  a 
charge  on  the  public.  Tell  of  the  injustice  of  making 
you  work  like  other  men.  Point  out  the  particular  day 
and  date  that  your  father  consummated  the  theft  of  a 
railroad  and  thereby  secured  luxurious,  idle  existence 
for  his  posterity  for  all  time.  Tell  how  harassed  you 
have  been  in  passing  time  away, and  really  how  beastly 
dull  it  is  eking  out  existence  with  nothing  useful  to  do. 
Tell  of  your  trials  and  worries  as  thougli  such  a  tale  of 
woe  were  a  reason  why  such  a  state  of  affairs  should 
continue. 

Then  tell  us  how  useful  your  foreign  or  domestic 
pleasure-seeking  was  to  the  toilers  who  sweat  three 
hundred  days  in  the  year;  how  necessary  it  is  to  have 
a  castle  or  a  hunting  park  in  Scotland  in  order  to  carry 
on  business  in  America ;  show  how,  in  spending  your  time 
in  pleasure,  you  were  giving  such  sage  management  to 
business  thousands  of  miles  away  that  your  services 
were  really  indispensable  to  the  toilers  of  the  land, and 
Avithout  you  really  they  could  have  accomplished  noth- 
ing. Tell  whether  it  was  yacht-racing  or  banqueting 
or  gambling  which  won  for  you  the  titles  of  captains 
of  industry,  and  define   the  duties  of  that  particular 


A  BREED  OF  BARREN  METAL  247 

rank.  It  would  be  a  long  and  interesting  story,  no 
doubt,  for  the  millionaire  to  make  clear  his  usefulness 
to  the  world  which  pays  him  tribute,  and  give  an  ac- 
count of  the  right  he  has  to  what  others  produce. 

Then  it  would  be  so  interesting  for  some  of  our  scions 
of  wealth  to  analyze  the  motive  of  philanthropy,  which 
prompts  the  man  who  has  all  that  millions  can  buy 
to  try  to  make  his  name  and  the  name  of  his  family 
immortal  by  erecting  himself  a  monument  in  endow- 
ing institutions  of  learning  within  whose  walls  plutoc- 
racy must  find  its  stronghold  with  money  wrung  from 
overworked,  ignorant  and  degraded  laborers.  Institu- 
tions controlled  by  millionaires  where  the  fair  goddess 
of  knowledge  is  prostituted  to  the  lusts  of  mammon, 
and  truth  is  crucified  to  protect  and  perpetuate  the  ill- 
gotten  wealth  of  unscrupulous  plutocratic  tyrants. 
That  is,  no  doubt,  a  high  type  of  philanthropy  which 
seeks  selfish  ends  under  the  cloak  of  public  good.  It  is 
moralh'  so  much  better  to  give  in  charity  even  what  we 
wrongfully  get  than  to  leave  w'hat  we  give  in  the  hands 
of  those  to  whom  it  belongs,  and  allow  them  to  use  it 
as  they  find  most  advantageous.  It  is  such  a  balm  to 
the  filcher  to  know  that  the  wealth  would  be  wasted 
if  he  had  not  taken  it  and  cared  for  it,  for  himself. 

Then  the  women  of  ease  might  take  the  rostrum  and 
tell,  the  dear  things,  how  their  dreadful  sisters  would 
persist  in  refusing  to  take  from  the  wealthy  shoulders 
every  earthly  l)urden  and  allow  God's  chosen  creatures 
to  give  tiiemselves  up  body  and  soul  to  social  vanities; 
to  become  the  puppets  of  men  of  wealth  or  slaves  to  a 
Henseless  fad.  \Vhat  a  frightful  world  this  would  be  if 
every  one  with  health  and  strength  were  obliged  to  help 
himself  or  herself  and  if  one  one-hundredth  of  the  peo- 
ple could  not  look  down  in  benign  complacency  on  the 
othf'r  mass  of  dolts  and  hickey?  and  give  them  their 
pitiful  scorn!  The  rest  of  the  people  were  really  nuuli' 
as  a  sort  of  instrument  for  developing  and  amusing 
these  chosen  ones,  and  anything  which  would  change 
such  a  state  of  things  would  make*  life  entirely  stale, 
flat  and  unprofital)le  for  (he  chosen  few.  As  for  the  unid 
sills  themselves,  they  do  not  count. 


248  A  BREED  OF  BARREN  METAL 

And  you  learned  Solons  who  have  grown  gray  in  pulse- 
feeling  and  declamation,  ye  hoary  temporizers  who  will 
give  the  people  as  little  as  possible,  and  proclaim  that 
that  little  is  a  boon  from  the  goodness  of  your  souls, 
let  your  voices  be  raised  in  defense  of  "honest  money," 
the  glittering  food  of  Midas,  the  shekels  of  the  Shylock. 
Parrot  platitudes  which  you  do  not  take  the  trouble  to 
understand.  Conjure  up  the  grim  shades  of  Hamilton 
and  Chase,  who  preached  gold  and  used  paper  in  its 
worst  form.  Re-eclio  the  sentences  of  the  long  line  of 
bankers  and  money-lenders  who  have  fully  half  a  dozen 
times  by  the  power  of  that  gold  brought  the  country  to 
the  verge  of  bankruptcy.  Put  on  the  brakes  firmh'  and 
show  that  a  shining  yellow  toy  is  the  only  instrument 
which  civilized  man  can  devise  to  carry  on  his  trade 
with  his  fellow-men.  You  will  need  all  of  your  resources, 
for  the  struggle  of  freedom  with  their  golden  fetters  is 
at  hand. 

Let  the  Rothschilds  and  their  Cockney  confreres  come 
forward  and  save  the  dear  toilers  of  America  from 
ruin.  Let  these  usurers  who  for  centuries  have  drawn 
a  steady  stream  of  wealth  into  England  from  all  quar- 
ters of  the  world,  by  the  aid  of  the  gold  insanity,  tell 
how  dangerous  it  would  be  to  detach  the  tentacles  of 
the  gold  octopus  from  the  industries  of  the  world.  Let 
them  point  out  the  magnitude  of  the  calamity  of  ceas- 
ing to  pay  billions  each  year  to  the  syndicate  in  the 
control  of  the  gold  of  the  world,  for  the  control  of  that 
gold.  Yours  will  be'  an  interesting  story.  But  every 
citizen  of  the  country  has  a  stake  as  dear  as  you — his 
life  and  happiness.  Do  not  assume  that  you  alone  have 
a  right  to  be  heard.* 

All  you  who  thrive  by  taking  part  of  what-  he  pro- 
duces from  your  laboring  brother,  will  be  expected  to 
fight  a  rational  currency  system  to  the  death.  You 
have  cunning  and  knowledge  and  the  jwwer  it  gives, 
but  the  waves  of  popular  discontent  are  surging  against 
the  fetters  of  iniquity  and  wrong.      When  the   pressure 

*I  do  not  hold  for  a  moment  that  the  wealthy  are  not  personally  as  virtuous  as 
the  poor,  and,  under  like  circumstances,  would  be  governed  by  like  motives;  but 
it  would  be  flying  in  the  face  of  all  experience  to  expect  them  to  voluntarily  give 
up  the  industrial  advantages  which  the  present  order  gives  them. 


A  BREED  OF  BARREN  METAL  249 

becomes  too  great  the  golden  bands  will  go  with  the 
rest,  and  we  will  awaken  after  the  deluge  to  a  regen- 
erated and  revivified  industrial  system.  Interest-tak- 
ing is  being  tried  as  never  before,  and  this  time  the 
inquisitor  is  intelligence  instead  of  superstition.  It 
cannot  fail  to  fall,  and  on  its  ruins  must  be  built  the 
new  and  just  financial  system. 


CHAPTER  XXXV. 


A  Vision — A  promised  land — The  armies  of  toil-  The  attendant  specter — Two 
goals — The  giants  of  the  furnace — The  pale-faced,  cunning  man — The  specter 
of  want  and  the  specter  of  sham— Why?— The  solution— "Toil  or  perish" — The 
crisis — A  transformation— The  end. 

^^Saw  a  vision  of  the  world  and  all  the  wonder  that 
loould  be." 

I  SEE  before  me  a  country  fair  to  look  upon.  Its  grassy- 
slopes  are  animate  with  herds  and  flocks,  its  smiling 
valleys  wave  with  wheat  and  corn.  Its  broad  rivers 
stretch  away  to  the  great  ocean,  bearing  upon  their  bos- 
oms wealth  untold.  The  sun-kissed  spires  of  great  cities 
stud  the  banks  and  spread  away  over  the  gilded  hills. 
Miglity  lakes  float  a  commerce  never  dreamed  of  by 
Carthage,  Sidon  or  Tyre.  The  oils  and  silks  and  spices 
of  the  East  mingle  in  lavish  abundance  with  the  meat 
and  corn  of  the  West,  in  bursting  palaces  of  wealth. 
Rugged  mountains  lift  their  giant  forms  and  shake 
from  their  dripping  flanks  the  refreshing  dews  of  heaven 
upon  the  teeming  life  of  the  mellow  plains  and  hills; 
or  oppose  their  broad  backs  to  the  storm  king  as  he 
rages  in  destructive  fury  upon  their  precious  charges 
which  sleep  beneath  the  sun.  The  ample  strong-boxes 
of  those  rugged  mountain  kings  are  filled  with  treasure 
of  iron  and  lead  and  coal  and  silver  and  gold  and  oil, 
and  the  hale,  generous  guardians  toss  back  the  keys  and 
invite  the  millions  of  the  earth  to  help   themselves. 

Glittering  bands  of  steel  knit  together  ocean  and  lake 
and  river,  mountain,  hill,  valley,  dale  and  woodland. 
The  locomotive,  the  shuttle  of  industry,  flies  to  and 
fro  weaving  the  warp  and  woof  of  national  prosperity. 
It  is  a  scene  fit  to  gladden  the  hearts  of  archangels. 

Again  I  look  upon  the  enchanting  scene  and  I  see  it 

250 


A  BREED  OF  BARREN  METAL  251 

instinct  with  life.  About  the  teeming  valleys  and  sunny 
hills  are  seen  the  images  of  God  above.  I  draw  closer. 
There  is  an  intense  earnestness  in  those  pinched  and 
sun-browned  faces,  shaded  by  sere  and  withered  locks. 
Grim,  wiry  forms  in  somber-hued  rags  bespattered  with 
dust  and  grime,  move  to  and  fro.  Thin,  bony  fingers 
chisp,  with  the  iron  grasp  of  toiling  brawn,  curiously 
wrought  contrivances  of  many  shapes.  The  dull,  som- 
ber eyes  gleam  with  resolution  as  the  lines  move  along. 
It  is  a  battalion  of  the  army  of  toil  assaulting  the 
treasure-house  of  mother  Nature  The  scorching  sun 
directs  his  burning  shafts  full  upon  the  hosts,  but  they 
flinch  not.  Great  beads  stand  on  their  throbbing  fore- 
heads as  they  stare  the  flaming  monarch  full  in  the  eye, 
but  they  waver  not,  nor  pause  in  the  earnest  strife.  The 
heavy  ax  resounds,  the  ploughshare  grinds  the  pe  bbly 
soil,  toppling  forests  crash,  the  garnering  sheaves  send 
out  their  furnace  glow,  but  not  a  line  is  broken.  The 
grim  column  marches  on. 

A  cloud  of  anxiety  darkens  each  sunburnt  l^row. 
Some  far-off  goal  never  to  be  attained,  seems  dimly  in 
sight.  Each  casts  a  furtive  glance  behind,  then 
startled,  turns  and  toils  toward  some  distant  goal.  I 
look  and  wonder  what  is  the  prospect  which  gives  the 
toiler's  eyes  that  dull,  eager  look,  and  at  his  shoulder 
I  perceive  a  dim,  formless  thing,  the  ghastly  specter  of 
want.  As  the  toiler  pauses  in  the  arduous  conflict,  I 
see  this  hideous  monster  raise  his  skeleton  arm  and 
point  menacingly  his  bony  finger  to  a  great  chill  man- 
sion V)eyond  the  hill,  then  with  a  leer,  to  the  s(jught-for 
distant  goal. 

The  dull  eyes  of  the  toiler  forever  wander  there. 

All  about  the  chill  mansion  across  the  hill  are  groups 
r)f  mf^n  and  women  whom  the  weight  of  toilful  years  is 
lieariiig  to  the  earth.  The  knotted  liml)s  but  half  bear 
up  the  shrunken  bodi(;s,  and  the  locks,  whitened  by  the 
frosts  of  time,  toss  about  over  faces  from  which  the 
light  of  hope  has  lied,  and  left  a  blank  waste  or  i)a- 
thetic  second  childhood.  It  is  there,  to  the  almshouse, 
the  specter  points  and  h^eringly  (Contrasts  it  with  the 
cottage  of  peace  and  plenty  beyond,  always  far  beyond. 


252  A  BREED  OF  BAKREN  METAL 

The  eager  eyes  strain  harder,  the  toiling  muscles  knot 
and  the  struggle  with  nature  for  competence  is  pursued 
with  redoubled  force.  There  is  no  rest,  no  stopping  for 
breath.  Ever  present  by  the  toiler's  side  is  the  grim 
specter  to  remind  him  of  the  almshouse  or  the  cot  of 
peace.  He  groans  as  he  sees  his  fellow  soldiers  drop 
their  worn  weapons  from  their  enfeebled  hands  and 
shamble  off  in  the  tottering  procession  to  the  chill 
mansion  across  the  hill. 

My  eye  wanders  from  the  open,  sun-kissed  fields  and 
the  grim  army  struggling  there,  to  the  spire-decked, 
mansion-studded  cities.  There  is  a  great  black  building 
where  the  turbid  river  tide  chafes  against  the  murky 
bank.  Its  walls  are  grimed  and  smoke-stained  and 
its  windows  thick  and  gray.  I  look  within.  A  band 
of  giants  are  gathered  there,  stripped  as  for  'a  mighty 
conflict.  The  tense  muscles  knot  on  the  sturdy  bare 
arms  and  chests.  Great  drops  of  sweat  stand  upon  their 
brows.  Their  faces  are  dull  and  sullen  as  they  gleam 
with  a  weird  distinctness  in  the  fierce  white  glare  of 
the  great  hot  furnace.  Its  dull  radiance  lights  up  the 
great  rafters  and  soot-festooned  nooks, and  lends  a  sort 
of  unearthly  glow  to  the  whole  dark  scene.  This  is 
another  battalion  of  toil,  meeting  face  to  face  and  sub- 
duing for  the  cause  of  man  the  tyrannous  hosts  of  nature. 

The  same  eager  look  suffuses  each  pale, smoke-grimed 
face.  The  same  grim  resolution,  softened  now  and 
then  by  indifference  or  reckless  insouciance.  The  same 
goal  is  far  ahead,  the  same  grim  specter  at  each  shoul- 
der, the  same  bony  finger  and  the  same  cunning  leer. 
But  close  beside  the  gloomy  mansion  across  the  stream, 
surrounded  by  the  wrecks  of  toil  and  years,  are  the  cold 
gray  walls  of  a  great  chill  building  through  whose  nar- 
row barred  windows  the  sunlight  never  falls  on  the  de- 
fiant, scowling  faces  within.  And  as  the  giant  of  the 
furnace  follows  with  his  glance  the  specter's  bony  finger 
along  the  dusty  road  beyond,  he  sees  an  unkempt,  be- 
sotted face  staring  from  shaggy  locks^  and  a  form 
scarcely  human  staggering  along  in  a  mass  of  filthy 
rags, — the  tramp, the  derelict  of  the  highways  of  earth. 
The  specter  seems  to  laugh  a  low  laugh  of  satisfaction 


A  BREED  OF  BARREN  METAL  258 

at  the  scene,  but  the  furnace's  fiery  eye  has  fewer  ter- 
rors for  him  than  the  scene  without,  and  the  giant 
plunges  again  into  the  thought-devouring  conliict. 

Dazed,  I  turn  from  the  scene  and  look  around  for  a 
fairer  prospect.  But  wherever  I  go  I  see  beneath  the 
surface  the  same  grim,  unrelenting  conflict.  In  the 
sightless  depths  of  the  dark  mine,  in  the  balsam-laden 
forest  glades,  on  the  rugged  mountain  slopes,  in  the 
broad  harbors,  upon  the  tall  ships,  behind  the  flying 
locomotive,  in  the  stony,  sun-parched  streets,  in  the 
sickly,  nauseating  tenement,  in  the  stifling,  Overcrowded 
factory,  I  see  battalions  of  the  same  army  pursuing  the 
same  relentless  strife.  The  same  sordid  eagerness  lights 
up  the  eyes;  the  same  fixed  determination,  the  same 
despair,  hold  sway  by  turns  over  the  stolid  features. 
The  same,  whether  the  face  be  the  pinched  and  sun- 
browned  features  of  the  son  or  daughter  of  the  soil, 
the  bleached  cheek  of  the  sturdy  giant  of  the  furnace 
or  shop,  or  the  delicate  brow  of  the  pale  girl  of  the 
factory  or  tenement. 

Why  this  terrible,  unending,  hopeless  strife,  embit- 
tered "by  the  unbroken  presence  of  the  grim  specter  of 
want?  Can  such  a  promising  exterior  of  beauty,  peace 
and  plenty,  hide  but  care,  woe,  dread  and  disappoint- 
ment? Why  this  unrelenting,  hopeless  toil,  why  this 
pathetic  ending?  Why  the  almshouse,  the  prison,  or 
the  inclement  road,  with  its  menacing  human  derelicts, 
as  a  reward  for  years  of  toil?  Where  then  is  beauty 
and  happiness?  Is  this  fair  earth  but  a  chamber  of  hor- 
rors masked  with  a  glittering  tapestry? 

My  eyes  again  wander  along  animated  streets  of  fair 
cities,  whore  tall  piles  of  steel  and  l)rass  and  stone  and 
marble  risp.  Within  close  but  sunlit  rooms,  1  see  pal(( 
faces  i)ouring  (jver  l)road  books.  That  same  look  of 
eagerness  and  care  is  to  be  seen,  but  a  cunning  liglit 
lends  vivacity  to  the  face.  The  restless  e^-'es  glance 
furtively  over  the  ])ag(Hs  as  the  brows  knit  and  the  form 
sways  to  antl  fro.  The  specter  is  entirely  absent  or  but 
dimly  visil)le,  but  tiie  eager  eyes  still  strain  t(jward 
some  cov«il<!(l  obj(!ct  l)ey(jnd,  a  formless  lliing  i-ncuscd 
in  golden   robes   be-decked    with   jewels.      It    is   a   deity 


254  A  BREED  OF  BARKEN  METAL 

uever  met  face  to  face,  but  known  to  fame  and  fable  as 
the  Goddess  of  Success.  I  am  interested.  I  follow  the 
pale-visaged  votary  as  he  descends  in  the  iron  car  and 
rolls  noisily  away  to  the  broad  avenue,  beyond  the 
work-a-day  turmoil  of  the  city  streets.  I  follow  him 
up  the  marble  steps  into  the  tapestried  and  cushioned 
drawang-room.  I  follow  him  even  to  the  banquet 
board,  I  hear  the  glasses  clink  and  see  the  red  wine 
How.  I  hear  the  rustle  of  silks  and  see  the  forms  of 
delicate  women  flit  about  under  the  mellow  glow  of  the 
electric  lamps.  I  hear  merry  voices  and  mirthful 
laughter,  but  in  it  all  is  a  minor  note  of  discord,  a 
harsh,  grating,  sordid  sound.  That  eager  gaze,  still, 
distorted  features,  even  flushed  with  wine.  The  laugh- 
ter pealed  and  rolled  and  rung,  but  more  and  more 
became  a  senseless,  hollow,  mocking  sound,  an  almost 
frightful  thing.  The  looked-for  happiness  was  not  there. 
And  I  found  it  not  on  the  wave-kissed  sands,  among  the 
free,  unconventional  crowds  of  merry-makers;  not  in 
the  salon,  nor  the  yacht,  nor  the  theater,  nor  the  lec- 
ture hall,  nor  at  the  C(Micert,  nor  the  church,  nor  the 
ball;  but  instead  the  same  hollow  laugh  of  unreal  mirth, 
the  false,  jarring  note,  the  same  eager  look.  The  spec- 
ter of  sham  was  as  constantly  present  among  the  bat- 
talions of  fashion  and  pleasure  as  was  the  s^Decter  of 
want  among  the  battalions  of  toil.  The  chamber  of 
horrors  was  still  there,  even  though  the  gilding  was  a 
little  more  ingenious.  I  looked  and  listened  and  asked 
why. 

An  imperative  desire  took  possession  of  me  to  know 
whence  came  all  this  cruel  fear  and  bitter  unreality  in 
a  land  of  beauty  and  plenty.  I  watched  and  saw  again 
the  army  of  toil  plunged  into  the  contest,  the  enemy 
the  formless  thing  of  yore.  Fast  and  sullenly  did  the 
toiling  army  pile  between  them  and  the  bony  monster, 
Want,  stores  of  the  thing  men  call  wealth.  It  seemed 
the  only  barrier  between  them  and  the  dominion  of  the 
monster's  rule.  As  they  turned  to  wrest  from  nature 
still  more  and  more,  to  raise  the  barrier  higlier,  other 
brawny  giants  step  boldly  up,  and  seizing  from  the 
barrier  whatever  they  desire,  bear  this  wealth  away  to- 


A  BREED  OF  BARREN  METAL  255 

ward  the  palaces  of  pleasure  and  the  mansions  of  the 
pale-faced  men  with  the  cunning  eyes.  These  pale-faced 
men  watched  and  directed  that  it  be  put  away  to  ap- 
pease the  all-devouring  goddess  of  luxury  and  success. 
But  even  the  brawny  men  who  bore  this  store  of  wealth 
to  the  shrine  of  the  gilded  goddess  kept  but  a  little  to 
protect  themselves,  and  the  specter  was  also  ever  at  their 
backs.  I  saw  now  and  then  a  grim-faced  toiler  look  up 
and  see  his  painfully  accumulated  store  disappear  be- 
hind the  strong  doors  of  his  pale-faced  neighbors.  He 
would  look  at  the  njessenger  of  the  votaries  of  success 
coming  back  always  empty-handed  for  more,  and  scowl 
until  the  bony  finger  of  the  specter  would  remind  the 
man  who  stopped  to  think,  of  the  grim  horrors  of  his 
domain,  and  the  toiler  would  sullenly  bow  his  head 
and  toil  again.  I  saw  a  cordon  of  sturdy  men,  the 
strongest  of  the  land,  drawn  about  the  store-houses  of 
the  ])ale-faced,  cunning  men,  and  the  rations  of  these 
guards  were  also  taken  from  the  meager  barrier  which 
the  soldier  of  the  battalion  of  toil  placed  between  him- 
self and  want. 

There  seemed  an  unwonted  movement  in  the  toiling 
ranks.  A  few  bolder  than  the  rest  dared  to  stare  the 
specter  in  the  face  and  watch  as  their  stores  were  trans- 
ferred to  the  houses  of  the  votaries  of  pleasure  and  suc- 
cess. Soon  they  noticed  that  not  one  of  those  pale-faced, 
cunning  men  took  part  in  the  battle  against  the  com- 
mon enemy,  Want,  but  bent  all  of  their  cunning  energies 
to  carrying  away  and  appropriating  the  barriers  which 
the  battalions  of  toil  reared  against  the  imphiealde  foe. 
EveMi  th(jse  who  did  the  work  of  taking  away  tlie  wealth 
were  toilers  like  themselves. 

First  they  stocjd  dazed  by  the  revelation,  awed  by 
their  disappearing  defenses,  then  with  a  courage  born 
of  desperation  they  called  to  their  companions  to  look. 
The  knotted  sinews  relaxed  and  the  dull  eyes  opened 
wide.  The  pale-faced,  cunning  men  ])ointed  to  the 
specter  who  hissed  in  low,  chuckling  toni's:  ••Tdjl  or 
perish."  The  whole  chamber  of  horrors  was  displayed 
before  the  toiler's  eyes.   The  alinsh<juse  and  the    prison 


250  A  BREED  OF  BARREN  METAL 

and  the  derelict-haunted  road,  even  to  the  nameless 
grave  in  the  potter's  tield.  As  the  battalion  leaned  upon 
its  arms  the  bony  linger  lifted  the  veil.  There  before 
him  appeared  the  suffocating  tenement  where  chill 
death  painted  black  slindows  around  eyes  gleaming 
with  fever.  Parched  infant  tongues,  furred  and  hot, 
panted  in  vain  for  the  saving  draught.  Haggard, faint- 
ing mothers  tottered  empty-breasted  over  dying  babes. 
Cold,  dank  basements, reeking  with  filth,  sheltered  men 
turned  to  brutes  and  children  transformed  to  savages. 
The  whole  panorama  of  distress  is  seen;  the  pale-faced, 
cunning  man  leers  at  each  detail,  but  still  the  grim 
hosts  of  toil  stop  and  look.  I  hear  a  low  voice  hiss, 
"Toil  or  perish  r'  but  the  host  moves  not.  There  is  a 
desperate  gleam  in  eager  eyes  and  a  dark  scowl  on  each 
sullen  face  as  they  see  their  hard  wrought  store  disap- 
pear and  leave  them  to  the  mercies  of  the  monster  Want. 

"By  what  right?''  arises  in  a  hoarse  whisper  and  is 
caught  up  until  it  becomes  a  mighty  chorus  which  sends 
a  thrill  of  fear  through  those  of  the  cunning  eyes  and 
makes  their  pale  faces  darken.  "By  the  right  and  au- 
thority of  the  law  of  which  these  are  the  conservators, " 
hiss  the  pale-faces  with  a  sneer,  and  they  point  to  the 
cordon  of  blue-coated  giants  who  stand  between  the 
toilers  and  their  fast-disappearing  stores.  Grim  mutiny 
appears  in  every  haggard  toiler's  face.  If  the  law  is 
against  them,  their  case  is  desperate  indeed.  Soon  I 
hear  a  murmur  rise,  "Let  us  change  the  law, the  law  is 
ours."  It  is  caught  up  slowly  at  first,  then  faster  and 
faster  by  the  sullen  ranks,  until  it  becomes  the  general 
war-cry  of  the  whole  host. 

The  cunning  eye  becomes  sinister,  the  soft-handed 
captains  argue,  then  threaten,  then  plead.  They  call 
upon  the  blue-coated  giants  to  preserve  inviolate  the 
rights  of  ])roperty.  They  point  out  to  these  that  with- 
out such  hoards  to  protect,  a  large  part  of  their  occupa- 
tion would  be  gone.  But  the  blue-coats  remain  stolid. 
The  power  was  then  on  the  other  side  and  it  would  be 
folly  to  try  to  stem  such  a  current.  They  could  not  if 
they  would.  There  was  still  one  resort:  the  gladiator 
battalions  whose  business  it  is  to  kill. 


A  BREED  OF  BARREN  METAL  2o7 

But  they  too  were  foiled.  No  law  had  been  violated, 
it  had  been  but  changed,  and  the  chances  of  a  conflict 
against  such  a  force  with  law  on  its  side  were  not  the 
best.     The  soldier  did  not  budge. 

There  are  menacing  faces  in  the  ranks  of  toil,  hot 
indignation  goads  these  hardy  men  to  violence  as  they 
see  the  pale-faced,  cunning  men  plotting  to  defeat  the 
law,  but  calm-browed  brothers  step  before  their  wrath 
and  admonish  them  to  patience.  "The  law  is  ours. 
We  have  no  need  of  what  is  stored  away  in  their  pos- 
session. Let  us  keep  our  weapons,  the  instruments  of 
toil  which  we  now  use,  and  let  them  have  the  rest. 
Let  the  dead  past  l)ury  its  dead." 

The  pale  faced,  cunning  ones  stand  aghast.  They 
see  the  whole  world  of  industry  move  along  without 
the  slightest  relation  to  them.  They  see  men  of  their 
class  fast  taking  places  in  the  ranks,  glad  to  have  their 
wealth  used  and  preserved  for  them,  and  their  toil  re- 
munerated, simply  as  the  toil  of  others.  The  stores  of 
toil  rise  high,  and  the  grim  specter  slinks  awa}'.  His 
course  is  even  to  the  dcjmaiji  of  pleasure  and  success, 
even  to  the  al)iding-places  of  the  bediamonded  goddess 
on  her  gilded  throne,  whom  men  were  so  wont  to  wor- 
ship. Even  the  old  menace  of  the  specter  of  want  is 
turned  toward  the  frivolous  and  gay  of  yesterday,  as 
the  stores  of  toil  disappear  from  their  palaces.  The 
chamber  of  horrors  now  exists  for  thcun.  The  pale-faced, 
cunning  man  is  no  longer  serene  in  his  security.  His 
a[)peals  to  police  and  soldier  are  alike  in  vain.  He  sees 
the  blue  cordon  which  f(jrmerly  existed  for  him,  wheel 
about  and  l)ar  him  from  the  stores  which  the  toilers 
gathered.  Then  (mti  by  one  those  sturdy  conservators 
of  the  law  (lisapi)earcd  into  the  toiling  ranks. 

Then  the  pale-faced,  cunning  man  grew  gracious. 
Yes,  he  would  give  to  the  legions  of  toil  for  their  use 
all  that  he  had  if  they  W(Hild  hut  give  him  the  increase. 
He  was  met  by  a  merry,  hearty  laugh.  ''Increase  in- 
deed! that  is  a  ficti<jn  of  other  days.  'Tis  toil,  and 
toil  alone  which  increases;  come,  he  ones  of  us,"  and 
instruments  of  toil  an^  j)laced  in  thes(ift,  whit(i  hands. 
Slowly,  reluctantly,  he  takes  up   the  fight    figainst    the 


258  A  BREED  OF  BARREN  METAL 

now  disappearing  specter  of  want,  the  specter  who  now 
hovered  near  the  palaces  on  the  hill. 

I  looked  and  even  the  terrors  of  the  horror  chamber 
were  disappearing.  The  pinched,  sullen  faces  of  the 
days  gone  by  had  brightened.  They  were  softer  and 
had  lost  some  of  that  eager  look.  The  incubns  of  the 
dread  of  want  had  lifted.  There  was  no  specter  con- 
stantly menacing  those  who  worked.  No  visions  of  the 
almshouse  or  the  potter's  field,  of  famishing  babes  and 
starving  mothers.  The  mine,  the  shop,  the  forest  and 
the  field  were  filled  with  rosy,  beaming  faces  The 
faces  in  the  sunlit  offices  are  not  so  pale,  the  eyes  not 
so  hard  and  cunning  Tiie  throbbing  trains  bear  their 
precious  burdens  of  human  freight,  but  it  is  not  the 
sordid  worshipers  of  sham.  The  gleaming  shores  of 
the  broad  oceans  have  their  crowds,  but  what  a  change  1 
The  shrines  of  luxury,  frivolity,  pride,  licentiousness 
had  been  transformed  into  the  Afeccas  of  mirth-loving, 
healthful  toilers  on  happy  holiday  outings.  The  palaces 
of  sham  and  mammon  had  become  palaces  of  art.  The 
earth  had  its  bright  fruits  and  flowers  and  balmywinds 
and  grateful  suns  alike  for  all.  The  fair  exterior  of 
placid  streams  and  sunny  hills  and  teeming  valleys  and 
rugged  mountain  slopes  were  but  the  outward  expres- 
sions of  the  peace  and  happiness  within.  It  was  the 
happy  home  of  a  transformed  man. 


THE    END. 


IJNTVEn^^^ITY  OF  CAUFORNIA 

AT 

LOS  ANGELES 

T.TRRARV 


172   Bennett  - 
B43b  A  breed  of 

T^arren  metal, 


HB 

172 

B43b 


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